Oral Answers to Questions

FOREIGN AND COMMONWEALTH OFFICE

The Secretary of State was asked—

Climate Change

Mark Hendrick: What contribution his Department is making to initiatives aimed at improving the effectiveness of co-ordinated international efforts to address climate change.

Jim Murphy: The latest United Nations scientific report on climate change has shown that the scale and urgency of the challenge demands immediate international action. The Foreign and Commonwealth Office is working with Government partners, business and civil society—and through the European Union, the G8 and the UN—to mobilise international action on climate change.

Mark Hendrick: Does my hon. Friend believe that, as a result of the UN intergovernmental panel on climate change conference in Valencia, there is a need for an effective price signal to cut greenhouse gases significantly, and that the Chinese and the Americans might be willing to use mandatory and binding targets, which could be agreed at the Bali conference in December?

Jim Murphy: I am not sure that we are yet at the stage of the binding targets that my hon. Friend and many other Members would support, but in the context of world energy needs rising by 50 per cent. between now and 2030, there clearly is a need for concerted and immediate international action, particularly on China, which this year for the first time becomes the world's biggest carbon emitter. There is hope in the light of some of the work happening in China, and there is increasing pressure in the United States, partly driven by the findings of the Stern review, of course.

Geoffrey Clifton-Brown: In view of the Secretary-General's remarks last week that industrialised nations need to play a greater part in tackling climate change, what discussions is the Minister having with colleagues in other Government Departments—the Treasury, for example—so that international forums such as the Organisation for Economic Co-operation and Development and the World Bank continue to live up to the highest environmental standards?

Jim Murphy: The hon. Gentleman is absolutely right—this issue requires a cross-government approach, just as it requires a concerted approach by Governments and business across the globe. We are working through the United Nations—we have participated in a leading way in the UN Security Council debate—and we are trying to ensure that the work of the UN, the G8 and the World Bank is co-ordinated. I am happy to discuss this issue in greater detail with the hon. Gentleman.

Madeleine Moon: China has coal reserves of more than 1 trillion tonnes, is producing 1.2 billion tonnes a year and is opening some 550 new coal-fired power stations. What consideration has been given to, and what discussions are taking place on, expanding clean coal technology and sharing it with the Chinese, so that we can cut their carbon dioxide emissions? Such efforts would also help us to meet our own targets.

Jim Murphy: My hon. Friend has detailed knowledge of, and a long-held interest in, these issues. We are involved in a specific carbon capture and storage project in China, and wider efforts are being made regarding the intellectual property rights of climate change technology generally, so that such investment can be rewarded. Significant moves are therefore being made in China not just on coal, but on wider energy efficiency, and that is part of a continuing and growing international consensus.

Angus Robertson: The Minister will be aware that the Scottish Government have more ambitious climate change targets than those set at Westminster, so I am intrigued by the following question. How will UK Ministers co-ordinate best practice, in order to ensure the best co-ordination of international efforts to address climate change?

Jim Murphy: The hon. Gentleman makes an interesting point. Of course, if he and his party stopped opposing renewable wind energy schemes wherever they are proposed throughout Scotland, that would be a start. As I said to my hon. Friend the Member for Bridgend (Mrs. Moon), future investment is phenomenally important to the evolution of modern technologies. Many people who share an ambition for climate change technology would be puzzled—indeed, flabbergasted—by the Scottish Executive's budget announcement on cutting investment in Scottish universities.

Derek Wyatt: My constituents—and, I suggest, Members of the House—struggle to find independent and trustworthy information on green and carbon issues. Can I persuade my hon. Friend to open negotiations with Al Gore and our leading universities to create a green institute that could be the centre of such information for the world?

Jim Murphy: As my hon. Friend is aware, the UK is the first country in the world to set legally binding targets for CO2 emission reductions, and other countries are genuinely interested in incorporating that initiative into their own domestic legislation. Of course, there is more that we can do and I shall look into the specific issue that he raises, but it is a fact that the Foreign and Commonwealth Office has enabled 30 different visits by Stern to countries across the world, including Mexico, Brazil and countries in south-east Asia. They are very attracted to the research and analysis that Nick Stern has carried out.

Kosovo

Malcolm Rifkind: What recent assessment he has made of progress in the final status talks on Kosovo.

David Miliband: The UK fully supports the work of the EU-Russia-US troika aimed at bridging the divide between Pristina and Belgrade on Kosovo's future status. Intensive negotiations are ongoing and will be concluded by 10 December. We share the UN Secretary-General's view that the status quo in Kosovo, which is unique by virtue of its tragic history, is unsustainable. I have met leaders of both sides in the dispute and I am working with EU colleagues on contingency plans to develop a constructive EU position.

Malcolm Rifkind: Will the Foreign Secretary give a clear assurance that the United Kingdom Government will not recognise any premature declaration of independence by Kosovo before there is international agreement? Does he accept that to give such recognition would breach a Security Council resolution for which the United Kingdom voted and would conflict with the assurances that NATO gave Serbia at the time of the military action against that country? It would also have serious consequences with regard to the likely action by Republika Srpska and similar entities in Georgia, Azerbaijan, Moldova and other parts of the former Soviet Union.

David Miliband: The right hon. and learned Gentleman raises an important point. I can give him comfort in respect of the first half of what he said. I have made it clear to the Unity team, which represents Kosovo, its different parties and its Government, that it must work with the international community, because a chaotic and unplanned declaration by it would certainly not contribute to the sort of stability that we need. In respect of the second half of his question, resolution 1244, which forms the basis for UN action, for NATO action and for EU action, is very wide-ranging. As far as we are concerned, it allows us to proceed with the range of contingencies for which we have prepared. That legal base is an important part of this final piece of the Yugoslav jigsaw, which he knows well.

Mike Gapes: What discussions is the Foreign Secretary having with the United States Administration to try to persuade them not to recognise precipitately a unilateral declaration of independence and to use their influence with the Kosovo Albanians to allow a little more time in the last hope of getting some agreement?

David Miliband: I confirm that in September I chaired a meeting of the Contact Group at the United Nations in New York, in which Condoleezza Rice, of course, participated. That meeting gave full support to the current 120-day process of negotiations and discussions, following, let us remember, 15 months in which the Ahtisaari team had been leading on the issue. It is an opportunity for all sides to engage responsibly with the troika representatives. Post-10 December, we must ensure that the international community sticks together on this issue. That is what my hon. Friend the Minister for Europe was talking about yesterday at the General Affairs Council of the European Union. I shall certainly remain in touch with the US Secretary of State on this issue.

Peter Tapsell: Will the Foreign Secretary bear in mind that any appearance of a permanent separation of Kosovo from Serbia will lead to endless tension and instability throughout the Balkans, heightened by Russia's strong and understandable feeling of kinship with the Serbs?

David Miliband: The comment of the UN Secretary-General that the status quo is unsustainable is very important. The legitimate aspirations of more than 90 per cent. of the people of Kosovo for their nationhood to be represented—

Angus Robertson: indicated assent.

David Miliband: I see that the Scottish National party representative is nodding his head. Every single person who has studied this issue emphasises that the situation in Kosovo is unique and results from the tragic circumstances of the 1990s —[Interruption.] Members cite all sorts of parts of the world, but the situation in Kosovo is unique, not least because of the way that Kosovo is currently governed by a UN resolution, which has unique characteristics. Although we must recognise the rights of the minority community in the north of Kosovo, we must address the legitimate aspirations of more than 90 per cent. of Kosovo's citizens.

Denis MacShane: Will the Foreign Secretary assure the House that Britain's name and reputation will not be dishonoured or shamed by continuing to appease either Belgrade or Moscow, as happened in the 1990s, and by not allowing independence for the Kosovan people, who, first peacefully, then in a short military campaign, won their independence nine years ago, although they have not yet achieved it? Does he understand that it is in the interests of Serbia, which seeks to join both Europe and NATO, to let go of Kosovo? It is no more going to live under Serbian tutelage than Ireland will come back under English control or the Baltic states will come back under Russian control. Britain had a record of shame and dishonour in the 1990s in this area, and it must never be repeated.

David Miliband: I certainly agree about the terrible consequences of inaction in the early to mid-1990s. This is not about punishing Serbia, but about drawing a line under the terrible nationalist legacy of the 1990s. This process has been going on since 1999 in the UN and it is important that we see it through to a political conclusion.

Michael Moore: The whole House recognises the sensitivity of the situation in Kosovo and in the wider Balkans, and would also agree that we must ask Kosovan politicians not to rush to any unilateral declaration of independence. Does the Foreign Secretary accept that in return for that restraint the international community must not jettison the basic principles of the Ahtisaari proposals, which seek to ensure the rights of the Serb minority and set out a path towards Kosovo's independence? Does he also agree that if Russia alone stands in the way of a new UN Security Council resolution, the rest of the international community must take the lead in swiftly recognising Kosovo under the terms of the Ahtisaari plans?

David Miliband: The short answer to the first part of the hon. Gentleman's question is yes. The Ahtisaari plan was a painstaking piece of work and it is very much on the table. If more can be done to guarantee minority rights in the north of Kosovo, it should be done, but any suggestion that the Ahtisaari plan should be taken off the table would be quite wrong.

Andrew MacKinlay: In the Foreign Secretary's reply to the hon. Member for Kensington and Chelsea (Sir Malcolm Rifkind)—

William Hague: Right hon.—

Andrew MacKinlay: Don't interrupt me; you will upset my thought process. In the Foreign Secretary's reply, he referred to the legal basis, about which the UK is confident. In the Gracious Speech debate, he offered to share that legal advice with Opposition Front Benchers, and I shouted out, "What about the rest of us?" Will he disclose that information to the House? Yet again the Foreign Office is relying on legal advice that it has conjured up to buttress what might well be a foolhardy and reckless decision in respect of Kosovo, as well as a flouting of the UN.

David Miliband: When my hon. Friend says, "Yet again"—

Andrew MacKinlay: I mean Iraq—

David Miliband: I know. When he says, "Yet again", he answers his own question, because of course it is a long-standing position of all Governments that we do not publish Government legal advice—

Andrew MacKinlay: Dodgy legal advice.

David Miliband: It certainly is not dodgy legal advice. That is a slur on Government lawyers who do an honourable job and provide honourable advice.

Mark Francois: The whole House will appreciate that we could soon be facing a serious situation in the Balkans. The Foreign Secretary referred earlier to contingency plans, so may I ask him what contingency plans have been put in place by the EU and NATO to address any potentially difficult effects that a declaration of independence by Kosovo might have on Bosnia and Herzegovina or Macedonia?

David Miliband: As the hon. Gentleman knows, there are 18 battalions on the ground in Kosovo. The most important contingency planning that we can do is to work with both sides to ensure that they behave in a responsible way that engages with the international community. He rightly raises the issue of Bosnia, and the most important thing that we can do there is to support the work of High Representative Lajcák, because his authority is key to continuing stability in Bosnia, where there are real tensions at the moment—as the hon. Gentleman rightly points out. It is important that the authority of the high representative is maintained.

Darfur

David Drew: If he will make a statement on progress in the peace talks on Darfur.

Kim Howells: The Government welcomed the start of the Darfur political process in Libya on 27 October. Although it is disappointing that some rebel leaders are not engaging, it is good that civil society groups are represented. The Government of Sudan's commitment to a cessation of hostilities is potentially significant, but the violence and humanitarian suffering continue. The Government call on all parties to engage fully, to be prepared to negotiate and to cease acts of violence.

David Drew: I thank my hon. Friend for that reply, and congratulate the Government on the work that they are doing behind the scenes to try to provide some unity among the different groups who maintain their independence of mind. However, does he agree that it is vital that we do not give the moral high ground to those who intend to abstain from the peace talks? The best way to do that is to ensure that all members of civil society, including the Arabic people, are fully engaged in all the discussions that are going on. In that way, we will get a genuine peace settlement that will not unravel as the last one sadly did.

Kim Howells: Yes, I agree, and I congratulate my hon. Friend on his commitment to the effort to build peace in Darfur. There will certainly not be peace there unless all the parties come to the table and all the issues are discussed. The peace process must be worked on systematically, and we cannot expect success if there is only occasional attendance at the occasional meeting. That approach has failed in the past, and will do so in the future.

Andrew MacKay: Many hopes were placed on the African Union forces coming into Darfur but, sadly, they have been largely dashed because of the Sudanese Government's refusal to agree to the make-up of the peacekeeping force. What else can the Government do to put further international pressure on Khartoum?

Kim Howells: The right hon. Gentleman is right that that is one of the problems that has bedevilled any move towards peace in Darfur. We have worked with the Sudanese Government, and my right hon. Friend the Foreign Secretary has spoken at the UN about the need for Sudan to realise that there has to be an effective peacekeeping force there and not just one that is the most convenient for Sudan. That is an important point, and we shall keep on arguing it. If we get an effective peacekeeping force there, we may be able to turn from rhetoric into reality the Sudanese Government's new statements that they now want a peaceful outcome.

John Bercow: May I put it to the Minister of State that what is required is not a peacekeeping operation, but a peace-enforcement operation? Peace talks are necessary but they are not a sufficient condition of progress. Foot stamping by the Sudanese Government has so far prevented the necessary deployment, as my right hon. Friend the Member for Bracknell (Mr. Mackay) has observed, and that Government are now seeking to determine the peacekeeping force's precise ethnic composition. Given all that, can the Minister tell the House how optimistic he is, on a scale of one to 10, that the deployment will take place in Darfur before the genocide of Darfureans has been completed?

Kim Howells: The hon. Gentleman has been passionate about this matter for a long time, and he will know that I am an optimist—one cannot be Minister for the Middle East without being that. There have been rather more encouraging moves in the past couple of months, and I very much hope that they will result in some progress towards what he accurately describes as a situation in which the peace is guarded. We can negotiate from now until the end of the century but, as the right hon. Member for Bracknell (Mr. Mackay) noted, there need to be effective troops on the ground who are able to discipline both state representatives and rebels. Both sides must be part of the peace process, or else it will not succeed.

Remembrance Service (Cenotaph)

Lindsay Hoyle: What discussions he has had with representatives of the overseas territories on arrangements for the service of remembrance at the Cenotaph.

Jim Murphy: My right hon. Friend the Foreign Secretary has had no discussions with representatives of the overseas territories on arrangements for the service of remembrance at the Cenotaph. He lays a wreath on behalf of all the overseas territories at the service, and there are currently no plans to change that arrangement.

Lindsay Hoyle: I think that my hon. Friend will accept that the Foreign Secretary has not served in any wars, and that we should allow the London representatives of the overseas territories to alternate the wreath-laying duties between them. Their people fought in the war, and it is to them that the wreath pays tribute. I am sure that the ego of my right hon. Friend the Foreign Secretary is not so great that he will refuse to give up the wreath-laying duties to representatives of the overseas territories.

Jim Murphy: My hon. Friend is perhaps the greatest champion in this place of the rights of the overseas territories, in particular Gibraltar. We value the strong relations between Her Majesty's Government, Her Majesty the Queen and the overseas territories, whose representatives are regularly invited to events hosted by Her Majesty and her Government. I am sorry to disappoint my hon. Friend, with whom I often agree, but we have no plan to change the current arrangements at the Cenotaph.

Bob Russell: I support the hon. Member for Chorley (Mr. Hoyle) in his question, so will the Minister confirm that the Cenotaph commemorates all people from the Commonwealth and the empire as was who lost their lives not only in world wars but in more recent conflicts? As this year is the 25th anniversary of the Falklands war, is not it time that the Minister had a word with his ministerial colleagues so that people from the island of St. Helena were awarded the south Atlantic medal, which has, so far, been denied them?

Jim Murphy: I will of course bring the hon. Gentleman's comments to the attention of my right hon. and hon. Friends at the Ministry of Defence. I do not wish to upset him by championing the support of my hon. Friend the Member for Chorley (Mr. Hoyle) for the overseas territories, because the hon. Gentleman has a proud record in that matter, too. The current arrangements provide the correct balance: the central involvement of Her Majesty the Queen, the respect and honour shown in the act of national commemoration and the role played by the Foreign Secretary in laying a wreath on behalf of the overseas territories. We think that is the correct balance.

Iraq

John Barrett: If he will make a statement on Government assistance to locally employed Iraqi civilians.

Kim Howells: Our locally employed Iraqi staff have made an invaluable contribution, in very difficult circumstances, to the work of Her Majesty's Government in Iraq, and we owe them an enormous debt of gratitude. My right hon. Friend the Foreign Secretary set out in his written statements of 9 and 30 October our new policy of assistance to Iraqi staff. Eligible staff are now able to apply for assistance and a number have already done so.

John Barrett: What will the Government do to assist civilians whose lives will be at risk at the end of their duties to the UK? Will the Minister ensure that they are not left behind when our troops return home?

Kim Howells: I give the hon. Gentleman an assurance that everyone who meets the criteria will be properly looked after and their cases properly assessed.

Keith Vaz: How many Iraqi interpreters or civilians assisting the Government and our forces abroad have been granted leave to enter the United Kingdom since the Foreign Secretary's welcome statement of 9 October? Will the Minister confirm that if anyone is refused admission they will have the right of appeal and that they will not need to travel to Syria or other countries to make an application?

Kim Howells: So far, we have received 281 requests via the dedicated Foreign and Commonwealth Office e-mail address and about 10 postal applications. Of those, 181 were from former Ministry of Defence staff and eight were from former Department for International Development staff. Thirty-three forms were incomplete, or the applicants did not appear to have worked for a Department, 36 requests were from former FCO staff, including 10 who probably qualify for assistance, and another 23 are being assessed. I am sure that appeals will be made in the usual way through the immigration appeal tribunal.

Peter Viggers: Does the Minister agree that when foreign nationals are employed in any capacity it would be helpful if the terms and conditions of their employment were made clear from the outset?

Kim Howells: Yes, that would make our job a lot easier than it is at the moment.

Palestine

Chris McCafferty: What recent assessment he has made of the political situation in Palestine; and if he will make a statement.

David Miliband: As I said in my written ministerial statement this morning, I have returned from the region today more convinced than ever that there is an opportunity for progress towards a two-state solution. The Annapolis meeting later this month and the process that will follow need the support of the whole international community. As the Prime Minister said last week, we intend to make up to $500 million available over the next three years for economic reconstruction in the occupied Palestinian territories and on Sunday I saw in Jericho the basis for the additional £1.2 million for the EU police training mission in the west bank.

Chris McCafferty: I thank my right hon. Friend for that reply. In light of Israel's declaration of Gaza as a hostile entity, will he confirm that the Government view any collective punishment of Gazans, in particular the cutting of water supplies, as a war crime under the Geneva convention?

David Miliband: As the Secretary of State for International Development and I made clear when the announcement was made, we always oppose any form of collective punishment. It is vital that all states adhere to international and humanitarian law. I assure my hon. Friend that in, I think, all my meetings in Israel and the occupied Palestinian territories over the past three days, the humanitarian situation in Gaza in the short term, and the political situation in the longer term, have been a feature of the discussions.

Crispin Blunt: Any possibility of a settlement for the Palestinians has been made immensely more difficult by the building of illegal Israeli settlements in the west bank. It is a breach of the fourth Geneva convention and has been opposed by successive British Governments. However, there is a report in  The Jerusalem Post that the Foreign Secretary visited one of those illegal settlements. Plainly, it would be a manifest stupidity for someone in his position to have done that. Will he take the opportunity to tell the House that he did not visit one of the settlements and that the Government's position on Israeli settlement-building in occupied territory remains what it has always been?

David Miliband: Of course I am happy to make that clear. I visited Jericho and the EU police training centre there. I am certainly happy to make it clear that, as the hon. Gentleman indicated, successive British Governments have made their position on this issue clear, and there is certainly no change on the basis of any report in  The Jerusalem Post or elsewhere.

Martin Linton: While the Foreign Secretary was on his way to Jericho, did he not see the cranes and bulldozers expanding the settlements at Ma'ale Adumim, on Palestinian land, which is doing more than anything else to strengthen the position of extremists and to undermine moderate Palestinian positions, because it is in defiance not only of international law, the Geneva convention and UN resolutions, but the Oslo accords and the road map?

David Miliband: I did see those settlements. I also had a briefing from the United Nations Office for the Co-ordination of Humanitarian Affairs, which monitors these issues extremely carefully. My hon. Friend is absolutely right that it is very important that the settlement process that has been started is brought to a close. In that context, however, it is important for the House to recognise the statement made by Prime Minister Olmert yesterday, after his Cabinet meeting. He said, as a confidence-building measure in advance of the Annapolis meeting next week, that he was committed and that it was the position of his Government to fulfil their responsibilities under the first phase of the road map—which is precisely to cease settlement activity.

Malcolm Moss: In the past year, there have been well over 1,000 identified rocket attacks on Israel from Gaza. Thirteen Israeli citizens have been killed and 317 wounded. What are the Government doing to prevent the proliferation of missiles in the Gaza strip, which are the cause of unacceptable daily attacks on Israeli citizens?

David Miliband: The hon. Gentleman is right to raise the issue. Obviously arms smuggling into Gaza is a major concern of the Israeli Government. I discussed that in detail with the Israeli Foreign Minister and was then able to take up the issue that she raised with the Egyptian authorities—the Egyptian Foreign Minister and others—whom I met yesterday. I know that the hon. Gentleman studies this issue and he is absolutely right to raise the matter of rocket attacks. He mentioned the figure of 1,000 attacks. The House should be in no doubt that such attacks have continued right over the summer and continue to the present day. I know that it is of major concern to the Israeli Government—rightly—but it should be of concern to everybody.

Louise Ellman: Can the Foreign Secretary indicate what assurances President Abbas was able to give that he would be able to fulfil the first requirement of the road map—to dismantle the apparatus of terror?

David Miliband: I am happy to confirm to my hon. Friend that President Abbas was absolutely unstinting in his commitment to fulfil Palestinian obligations in respect of building a viable Palestinian state not just in economic terms, but in security terms—in relation to both the security of its own people and the security of Israeli people. The issue of the link to Gaza and the representative nature of President Abbas—as a representative of all Palestinian people—is vital. I am sure that the whole House will have seen the scenes last week of hundreds of thousands of Gazans demonstrating and then six of them being killed by Hamas thugs. That is an important issue that of course needs to be addressed in any long-term settlement.

Michael Ancram: Does the Foreign Secretary believe, before Annapolis, that it is possible to make genuine progress towards the creation of a Palestinian state without the consent and participation of representatives of all the Palestinian people?

David Miliband: There are two parts to that question. First, before Annapolis, the best that we can do is maximise the consensus that exists between both sides and launch negotiations for the first time in many years. The process of negotiation has been in deep freeze.
	Secondly, the right hon. and learned Gentleman refers obliquely to the position of Hamas. President Abbas is the elected leader of all the Palestinian people. It is for him to lead any process towards reconciliation across the divide that now exists between Gaza and the west bank. My impression is that much of the activity undertaken by Hamas since the coup in June has shown its true nature, not just to the wider world, but to the Palestinian people.

Richard Burden: May I congratulate my right hon. Friend on his visit to the region in the past few days and on his attempts to promote dialogue between Israel and Palestine? I welcome the points that he made about the need for economic development in the Palestinian territories, but can he reassure me that something will be done about the 563 restrictions on movement and access? If something is not done about them, any chance of Palestinian economic development or statehood will be a pipe dream.

David Miliband: My hon. Friend raises an important point. He will have noted the announcement made by Defence Minister Barak yesterday that between 20 and 30 checkpoints are being taken away—a start to the process that my hon. Friend describes. He will also know that Jon Cunliffe and my right hon. Friend the Secretary of State for Children, Schools and Families, in his previous capacity at the Treasury, produced a Government publication on the economic road map to peace. It makes very clear the links between economic development, improvements in security and tackling the checkpoints issue in the west bank.

David Lidington: May I express the Opposition's support both for the Foreign Secretary's work over the past few days and for his hopes for the Annapolis conference? Everybody in the House will want that conference to succeed. I put it to him that if we are to take a real step towards reconciliation in the middle east, it will require from Annapolis not just a statement with plenty of warm words, but a plan for practical steps on the ground, involving some painful decisions by both sides to start to rebuild trust that has been badly damaged in recent years. How confident is he that there is sufficient agreement, at least about an indicative timetable for such practical steps, so that the conference can be the success that we wish it to be?

David Miliband: I am happy to associate myself with the hon. Gentleman's remarks. Annapolis needs to set out the consensus that exists between the parties, including, critically, on the shared goal of a two-state solution—a viable Palestinian state living alongside a secure Israel. He did not specifically mention this, but it also needs to launch a negotiating process, the absence of which has been terrible for the political horizon that is necessary if we are to make practical measures really bite. He is right to say that practical, economic and security measures matter. I referred in my answer to what the UK Government hope to do. The work for Tony Blair as the Quartet representative is important, too. On timing, there is a short-term need for progress on practical measures, but the House will recognise that we need a timetable, or at least some sense of the timing, for the negotiating process. The emerging consensus that next year is absolutely critical to making substantial progress can give the process the spur that it desperately needs.

Pakistan

Eric Illsley: If he will make a statement on the political situation in Pakistan.

David Miliband: All friends of Pakistan will share the Government's grave concern about the state of emergency in Pakistan. We have strongly urged General Musharraf to restore the constitution immediately and to ensure that free and fair elections take place by mid-January. My hon. Friend will have seen yesterday's announcement that the elections will take place on 8 January. Democratic values and the rule of law are our best allies against the extremism that threatens both Pakistan and this country.

Eric Illsley: I am grateful to my right hon. Friend for that response. Does he intend to raise the issue of Pakistan at the forthcoming Commonwealth Heads of Government meeting, and will he continue to do all that is in his power, together with international partners, to ensure that the elections on 8 January are free, fair and properly observed? Will he continue to press General Musharraf to stand down as head of the army?

David Miliband: Certainly. I should have said in my answer that the meeting of the Commonwealth is particularly well timed. I shall be heading for Kampala tonight, and the meeting of the Commonwealth Ministers action group on Thursday morning will have Pakistan right at the top of its agenda. I am happy to confirm that it remains the strong position of the Government not just that General Musharraf must resign as head of the army, but that political prisoners must be released and that media restrictions and the state of emergency must also be lifted.

Simon Burns: Is it the Foreign Secretary's assessment that General Musharraf will still be in power in three months?

David Miliband: It is probably wise not to get into the prediction business in any political system, perhaps especially in respect of Pakistan and some of the other issues that we have spoken about, notably Kosovo. It is clear that there is unanimity across the international community about what General Musharraf needs to do. The best ally of stability in Pakistan is an extension of democracy, which is vital for the country and for the region.

Ann Cryer: Can my right hon. Friend give the House an update on the welfare of Imran Khan, the international cricketer? He is the chancellor of Bradford university and I have been asked by the university to raise the question. I have spoken to Maleeha Lodhi, the high commissioner, twice. She can tell me only that he is in prison and on hunger strike. Is there anything further that my right hon. Friend can tell the House?

David Miliband: I am happy to confirm that our officials are trying to make contact with Imran Khan or his colleagues and associates. We have all seen the news about his proposed or actual hunger strike. The most important thing to say is that he, like all political prisoners, should be released as soon as possible. If the story that was running on the wires this morning about 3,000 political prisoners being released is translated into action, we will all welcome that, but it must be a step towards all political prisoners being released.

Keith Simpson: The continuing state of emergency in Pakistan raises serious questions about the Pakistan Government's ability to maintain security throughout Pakistan and, in particular, in the volatile and largely ungoverned border areas with Afghanistan. Almost three weeks ago the Foreign Secretary said in his statement:
	"It would be wrong to say that we have seen any short-term spillover of the situation in Pakistan into the border area."—[ Official Report, 7 November 2007; Vol. 467, c. 134.]
	Is that still the case? Has any increase in cross-border incidents been reported by British commanders in Afghanistan? Is he confident that British forces are adequately equipped and protected to deal with their mission?

David Miliband: Yes, that remains the case, but the challenge for British forces in Afghanistan along the 2,600 km border remains a severe one. I can confirm to the hon. Gentleman that there has been no change in the reports to us about the situation in the federally administered tribal areas.

Zimbabwe

Philip Hollobone: If he will make a statement on the political situation in Zimbabwe.

Kim Howells: Under the misrule of President Mugabe, Zimbabwe's catastrophic decline continues. We have made it clear that no senior Minister will attend an EU-Africa summit in December if President Mugabe is there. We are supporting those working for democratic change. We are supporting African efforts, through President Mbeki, to resolve the crisis, and we are supporting, with humanitarian aid, the millions of Zimbabweans in desperate need of assistance.

Philip Hollobone: What recent discussions has the Minister had with senior representatives in the South African Government to persuade them to fulfil their responsibilities, as the main power in the region, to apply far more pressure on the Mugabe regime to change its ways?

Kim Howells: We have held many discussions on the matter with senior leaders in southern Africa. The hon. Gentleman is right. The thrust of his question is the key one: what are neighbours doing about putting pressure on President Mugabe? It is only the truth to say that unless they pressurise President Mugabe much, much more than they have done, he will not relinquish his position. He could even win the next election, and the misery of the Zimbabwean people could continue for a very long time.

Nicholas Winterton: I am encouraged by the Minister's reply to my hon. Friend the Member for Kettering (Mr. Hollobone). While it is important to bring pressure on Mr. Mugabe through African states, particularly South Africa, what new initiative might the Government seek to bring forward as a result of the Commonwealth Heads of Government conference that is taking place in a few days? Could we not use the influence of a country of growing influence—that is, India—and that of other Commonwealth countries to exert pressure to bring democracy, peace and genuine stability and improvement to Zimbabwe?

Kim Howells: Yes, the hon. Gentleman is quite right. My right hon. Friend the Foreign Secretary is travelling to Kampala this evening, and I know that he will attempt to use every meeting that he has on the margins of that conference to raise the subject and to urge other nations to start to apply pressure on President Mugabe. The hon. Gentleman knows that as Zimbabwe is not a member of the Commonwealth at the moment, it is not on the formal agenda. I wish that it was.

US Missile Defence

Danny Alexander: If he will make a statement on his Department's policy on the UK's involvement in the US missile defence system.

Paul Holmes: What his policy is on the UK's participation in the US missile defence system; and if he will make a statement.

Jim Murphy: The UK contributes to the US missile defence system through our operation of the radar at RAF Fylingdales, the data relay station at RAF Menwith Hill and our well-established technical co-operation programmes.

Danny Alexander: In February, the then Prime Minister promised a debate in the House on the UK's involvement in the US missile defence system. However, the Secretary of State for Defence later turned down such a debate in a letter to my right hon. and learned Friend the Member for North-East Fife (Sir Menzies Campbell). Does the Minister agree that a full parliamentary debate will be necessary before the United Kingdom takes any further steps in support of yet another controversial, unilateral and highly dangerous United States policy?

Jim Murphy: There has been no official request from the USA; as the hon. Gentleman knows, such issues are for the usual channels. There is a genuine issue about how the international community, particularly Europe, deals with the potential threat to the UK and Europe from a rogue state firing a missile across Europe. That is why we have given our support to the proposals at the moment in respect of the capacity of the deployment in both Poland and the Czech Republic. That is an important part of the wider defence of both the United Kingdom and Europe and against the potential firing of a missile by a rogue state, and particularly from one in the middle east.

Paul Holmes: Is the Minister aware that the programme has already cost the US more than $100 billion, yet its technology is unproven and does not work? The programme is designed to guard against an unforeseen future threat, yet it is destabilising Europe now. Is it not the most dangerous and expensive white elephant in history? How much will it cost British taxpayers?

Jim Murphy: With respect, I think that that is an absolutely ridiculous assessment of the situation. The fact is that there is the potential threat of a rogue state attacking Europe, in the future, by the use of such missiles. It would be irresponsible in the extreme if we were not to, yes, participate with the United States, yes, have discussions with Poland and the Czech Republic, and yes—and importantly—have them with our NATO allies and friends about how best to protect ourselves and our European neighbours from a potential attack from a rogue and dangerously evolving threat.

Topical Questions

John Mann: If he will make a statement on his departmental responsibilities.

David Miliband: I have just returned from the middle east, where I spoke to Israelis, Palestinians and Egyptians about the contribution that the UK can make to progress towards a lasting two-state solution. Tomorrow, I will join Her Majesty the Queen, the Prime Minister and other ministerial colleagues for the state visit to Uganda and the Commonwealth Heads of Government meetings, whose agenda will focus on climate change, international development, education and the situation in Pakistan.

John Mann: My right hon. Friend will be aware of the positive cross-party and Government work done on anti-Semitism in this country. He will also be aware that anti-Semitism is not just a British problem but one that is growing across the European Union. Will he be prepared to consider how he can best raise the matter with ministerial colleagues from other European countries?

David Miliband: I certainly will. I can also say that when I recently met representatives of American Jewish groups in New York, they said that they recognised last year's parliamentary inquiry into anti-Semitism as an absolute landmark—not only in this country, but globally—for the sort of investigation and vigilance that are so important. I am happy to ensure that all EU colleagues know of the work done by that cross-party parliamentary group and to look at ways in which we can follow it up. I know that my hon. Friend and colleagues recently met my hon. Friend the Minister for Europe. We will certainly be happy to take the issue forward in any sensible way.

William Hague: On Wednesday, the Foreign Secretary circulated a speech in which he called for the creation of an EU military capabilities charter. On Thursday, when he delivered the speech, all references to this had been removed, apparently by the Prime Minister. Is the Foreign Secretary in favour of a military capabilities charter, or not?

David Miliband: I can only think that the right hon. Gentleman did not read the speech that I put out on Thursday. If he looks at the section on defence, he will see that it says, first, that we need to enhance the capabilities of European nations in respect of defence issues; secondly, that we need to co-ordinate them better so that when we work with NATO we do so in a sensible way; and thirdly, that we need to ensure that European forces are used in a preventive way. That seems to me to be an utterly sensible thing to do.

William Hague: I think that that roughly translates as, "Not any more", and that the Foreign Secretary was muzzled by the Prime Minister, which at least gives him something that he can recommend to his wise eminence, Lord Malloch-Brown, from time to time. Instead of unseemly accusations of disloyalty and destabilising each other being flung between No. 10 and the Foreign Office in the weekend press, is it not vital that the Prime Minister and the Foreign Secretary make a joint effort on many of the issues facing the nation? For instance, will they, in the coming days, seek to ensure as a matter of urgency that a senior single co-ordinating figure is appointed in Afghanistan for the international aid and reconstruction effort so that tactical successes there do not turn into strategic failure?

David Miliband: As the Prime Minister said in his statement last week, we are certainly committed to improving the co-ordination of forces in Afghanistan; in fact, that idea is being developed actively at the moment and will come to fruition. However, I have to say to the right hon. Gentleman that this time last week he set out in the Queen's Speech debate the new Conservative policy on the European treaty, and within one hour his own leader had rubbished his statement.  [ Interruption. ] Oh yes—I look forward to discussing it with him. On this side of the House, we agree our speeches in advance rather than having to correct them afterwards.

David Hamilton: Does my right hon. Friend the Foreign Secretary share my concern that to date there has been no compromise leader appointed for Lebanon? What is he doing about that?

David Miliband: Last night, I was rung by the Secretary-General of the United Nations, who has recently been in Lebanon. The impending crisis four days before the election of a new president is a very serious concern, not least given the dangers that it poses to the wider middle east peace process. My hon. Friend is absolutely right to raise the issue. On Sunday night in Jerusalem, I met my colleague, the French Foreign Minister, who was going back to Beirut for the second time in a week to try to work on the issue. I assure my hon. Friend that, with our ambassador there, we are working on it too.

Chris Bryant: Over the past few years, President Putin has made it virtually impossible for anybody to launch a new political party in Russia, and he has made it much more difficult for smaller parties to get elected to the Duma by raising the threshold from 5 per cent. to 7 per cent. He has also closed every single independent television station in Russia. Now, he has made it more difficult for the Organisation for Security and Co-operation in Europe to monitor the elections in December. It is becoming increasingly difficult not to come to the conclusion that those elections will be neither free nor fair and that Russia is, dangerously and sadly, flirting with totalitarianism again.

Jim Murphy: My hon. Friend is absolutely right. It is very disappointing that the OSCE observer mission has not been able to take up its opportunity to visit Russia to act as independent and impartial technical observers of the Duma elections. It is clear that the democratic space in Russia has shrunk over recent years. The space for civic society and the media to operate freely has decreased. We will continue to press for a modern Russia that conforms to modern democratic international norms, which would involve full access for the OSCE without inhibitions being put in place by the Russian authorities.

David Heath: May I return the Foreign Secretary to the issue of Kosovo and the Balkans? In the event of Kosovo achieving independence, it would be extremely difficult to explain to those in Republika Srpska, let alone the Albanians in Macedonia or the Abkhazians, that they should not do the same. In his earlier reply, he suggested that the answer to ensuring the territorial integrity of Bosnia and Herzegovina was to enhance the authority of the high representative. What other steps has he taken to produce contingency plans for the region to ensure that Bosnia and Herzegovina stays in one piece and stays at peace?

David Miliband: I am happy to address that point, but for the record, I said that we have to back up the high representative's authority. We are not making proposals to enhance it, as the hon. Gentleman puts it. The best thing that we can do is undertake practical projects such as police reform. That is a major issue in Bosnia, and it is sensible to take such action before a crisis rather than afterwards.

Ann McKechin: Given that it has been reported that the Chinese authorities are to offer a $5 billion credit line to the Government of the Democratic Republic of the Congo in return for mineral rights without any apparent conditions, will my right hon. Friend indicate our concerns to the Chinese Government about the need for proper conditions regarding governance and corporate accountability when dealing with the exploitation of minerals?

David Miliband: My hon. Friend has campaigned long and hard on that issue in general, and on the specific issue of attacks on women in that country. I can confirm that we are working with all international partners to ensure that our aid policies are targeted at the right people and that they support the right rather than the wrong actions.

Derek Wyatt: I am a great fan of Joseph Nye's work on soft power. At some stage, Mugabe will fall in Zimbabwe. Can my right hon. Friend reassure me that we will have a diplomatic solution on a "soft power" basis in Zimbabwe when Mugabe does fall?

David Miliband: Perhaps my hon. Friend is referring to the need for economic reconstruction in Zimbabwe. That is impossible while President Mugabe is pursuing completely wrong-headed policies that have plunged the country into the chaos of 8,000 per cent. and now 14,000 per cent. inflation. I can confirm that as soon as there is a sensible Government in Zimbabwe, we will want to work with them not just on economic issues, but on broader social and political reconstruction.

David Amess: On Friday, the opposition Iranian organisation the People's Mujaheddin of Iran will learn if it is to be removed from the European Union's list of proscribed organisations. If it is, will the Secretary of State remove it from our own list?

David Miliband: This issue is sub judice at the moment, and it is therefore very difficult to comment on it. In general, I can say that, across the House, we deplore any terrorist activities by any organisation.

Graham Brady: What representations have Ministers made to other EU Governments with the aim of blocking proposals for an EU food-labelling regime that would reduce customer information, not increase it?

Jim Murphy: It is a silly proposal, and we will not be supporting it.

Phyllis Starkey: The European Union is currently funding fuel supplies to Gaza. If the Israeli Government go ahead with their proposal to reduce fuel supplies by 20 per cent., in contravention of international humanitarian law, would the Foreign Secretary be satisfied that that continued EU funding was consistent with EU law?

David Miliband: I will certainly look into the legal issue that my hon. Friend raises, but the basic humanitarian issue, which is the need for the people in Gaza to be able to keep body and soul together, is essential and is at the forefront of our minds in discussions throughout the EU and in the region.

Patrick Cormack: Will the Foreign Secretary take every opportunity that Kampala offers to talk to African Heads of Government and to persuade them of what an appalling regime Mugabe is running in Zimbabwe? It is far, far worse than anything that exists in Pakistan.

David Miliband: There is no question about that; I am happy to provide that confirmation to the hon. Gentleman. I am confident that I will go there with the unanimous view of the House that the situation in Zimbabwe is not just an appalling tragedy, but a preventable one. President Mugabe's role in that affair needs to be at the forefront of our minds.

Don Touhig: Veterans of the Malaysia campaign are allowed to accept the Pingat Jasa Malaysia medal, but not wear it on public occasions such as Remembrance Sunday. As my right hon. Friend the Foreign Secretary has responsibility in this area, does he agree that the decision of the Committee on the Grant of Honours, Decorations and Medals is unjust, and will he intervene to overturn it?

David Miliband: I am happy to take up the issue that my right hon. Friend raises. Granting the medal was an important step forward, which has been widely welcomed. However, I shall certainly look into the matter.

John Baron: The Foreign Secretary will be aware of my correspondence with the Department about the case of my constituent, Grace Ciliberto, whose son was abducted to Dubai, despite being the ward of an English court. Although I accept that normal consular advice was given, will the Foreign Secretary explain why no top level diplomatic contact has been made with the Dubai authorities to get Mrs. Ciliberto's son returned to this country? Will he meet me to discuss the matter?

David Miliband: It would be wrong to discuss the details of an individual case on the Floor of the House, but I—or one of my hon. Friends—will be happy to meet the hon. Gentleman to go through them.

Jim Cunningham: What assistance is my right hon. Friend giving to Bangladesh to cope with the flooding disaster?

David Miliband: I am sure that all hon. Members viewed the situation in Bangladesh with horror. The matter obviously falls to the Department for International Development and its emergency relief contingency plans. However, I am happy to write to my hon. Friend and place in the Library clear details of the way in which the UK Government are responding. I assure him that, on a diplomatic level, we are in touch with the caretaker Government in Bangladesh to ensure that everything possible is being done to support them.

Denis MacShane: On a point of order, Mr. Speaker.

Mr. Speaker: I think that the last thing the House wants at the moment is a point of order.

HM Revenue and Customs

Alistair Darling: With permission, Mr. Speaker, I should like to make a statement on the breach of procedures which led to personal data relating to child benefit from Her Majesty's Revenue and Customs going missing.
	I shall set out the nature of the data and the circumstances relating to how they went missing. However, it might be helpful to the House if I set out the background first. The National Audit Office, which is independent of Government but answerable to Parliament, has a right to ask for and access data from HMRC in discharging its compliance responsibilities.
	In March, it appears that a junior official in HMRC provided the National Audit Office with a full copy of HMRC's data in relation to the payment of child benefit. In doing so, the strict rules governing HMRC standing procedures were clearly not followed. Those procedures relate to the security of and access to data as well as their transit to ensure that they are properly protected. That information should not have been handed over by HMRC in the way that it was. However, I understand that in this case the NAO subsequently returned all the information that it received in March to HMRC after auditing it.
	It now appears that, following a further request from the NAO in October for information from the child benefit database, again at a junior level and again contrary to all HMRC standing procedures, two password-protected discs containing a full copy of HMRC's entire data in relation to the payment of child benefit were sent to the NAO, by HMRC's internal post system operated by the courier TNT. The package was not recorded or registered. It appears that the data have failed to reach the addressee in the NAO.
	I also have to tell the House that, on finding that the package had not arrived at the NAO, a further copy of those data was sent, this time by registered post, which did arrive at the NAO. However, again HMRC should never have let that happen. Although it is believed that the data were sent from HMRC to the NAO on 18 October, the fact that they did not arrive was not reported to HMRC's senior management until 8 November, nearly three weeks later.
	I was informed on Saturday 10 November and immediately instructed that comprehensive searches by customs officers be carried out on all premises where the missing data might be found. Those searches are continuing. I asked for an immediate investigation, which was initiated that weekend. I also insisted on immediate steps to prevent this from happening again. Action has been taken.
	On Monday 12 November, HMRC informed me that evidence might have been found of the route taken by the data and that they were likely to be found. However, by Wednesday 14 November it was clear to me that the HMRC searches had failed to find them. I therefore instructed the chairman of HMRC to call in the Metropolitan police to conduct a full investigation, in order to find the missing package. That investigation is still under way. Our priority was and is to find the data. Searches have been and continue to be carried out, including of HMRC and National Audit Office premises, and staff are being interviewed. So far, however, the missing data have not been found.
	The police tell me that they have no reason to believe that these data have found their way into the wrong hands. The police are not aware of any evidence that they are being used for fraudulent purposes or criminal activity.
	I will tell the House what is missing as a result of this extremely serious failure on the part of HMRC to protect sensitive personal data entrusted to it in breach of its own guidelines. In terms of protecting confidential data, Her Majesty's Revenue and Customs is operationally independent of Ministers. It is established by statute and run by its chairman, Paul Gray, and a board of commissioners who are responsible for its operations but answerable to Parliament through me. Last week Paul Gray told me on his own initiative that given the seriousness of the operational failing he should resign. He has now confirmed that intention, and I am grateful to him for his contribution to the work of government, in HM Treasury, the Department for Work and Pensions and then HMRC.
	The missing information contains details of all child benefit recipients: records for 25 million individuals and 7.25 million families. Those records include the recipient and their children's names, addresses and dates of birth, child benefit numbers, national insurance numbers and, where relevant, bank or building society account details. I regard this as an extremely serious failure by HMRC in its responsibilities to the public.
	In making this statement today, I have had to balance the imperative of informing the House and the public at the earliest opportunity with ensuring that when I did so the appropriate safeguards were in place to protect the public, including in relation to bank accounts. Indeed, the banks were adamant that they wanted as much time as possible to prepare for this announcement. I discussed the issue with the Information Commissioner on Thursday, who agreed that appropriate remedial action needed to be taken before a public statement was made. This action has now been taken. I have also sought the advice of both the Financial Services Authority and the Serious Organised Crime Agency, and other Departments have also been made aware of the issue.
	Let me set out what we have done. First, the UK Payments Association, the British Bankers Association and the Building Societies Association have been informed, and through them HMRC informed individual banks and other financial institutions, including building societies and post offices, of affected accounts. Secondly, individual institutions are flagging those accounts, which enables them continually to monitor for irregular activity. They tell me that so far they have found no evidence of such activity. Thirdly, individual institutions are also tracking back and analysing transactions on affected accounts to 18 October. Again, they have so far found no evidence of unusual activity. They will continue to monitor those accounts, so that if there is any suspicious activity, action can immediately be taken. Fourthly, if someone is an innocent victim of fraud as a result of this incident, people can be assured that they have protection under the banking code, so that they will not suffer any financial loss as a result.
	The UK Payments Association has confirmed that it is confident that every action has been taken by the banking industry to minimise the risk of any fraud. It has also confirmed that the missing data are not enough in themselves for someone to access a person's bank account for fraudulent purposes, as additional security information and passwords are always required. However, we have to recognise the increased risk caused by these missing data. People will therefore want to monitor their accounts and guard against any unusual activity. The advice of banks is that there is no need for customers to ask for a new account or to contact their bank or building society. However, they should do what they should be doing in any event: checking their bank statements to keep a close eye on their account for any unusual activity; contacting their bank or building society immediately if they see anything in their statement that concerns them; and not giving out personal or account details requested unexpectedly by phone or e-mail. I reiterate that the banks have made it clear that individuals will not have to pay out for any loss in the event that they become the innocent victims of fraudulent activity. I can tell the House that child benefit payments will continue to be paid as before.
	There are already clear HMRC standing procedures, which appear to have been broken. HMRC has initiated changes to security processes and procedures, so they will now take place only with written authorisation from a senior manager and with appropriate protection for any transfer.
	The police investigation continues, although there is also likely to be an inquiry into the missing data by the Independent Police Complaints Commission, which has responsibility for monitoring Her Majesty's Revenue and Customs. I have kept the Information Commissioner informed. It is highly likely that there have been breaches of the Data Protection Act, which the commissioner will investigate.
	The Government take the protection of personal data, in whatever form, extremely seriously and have therefore put in place and are strengthening rights and safeguards on the use and handling of such data. The Data Protection Act sets out the framework enforced by the Information Commissioner and the courts. Departments have specific controls on information sharing and duties of confidentiality that are being enhanced by amending the Data Protection Act to guard against misuse and provide further information to citizens about the information that the Government hold.
	Last month the Prime Minister asked the Information Commissioner, Professor Mark Walport, director of the Wellcome Trust, to carry out a review of the framework in the United Kingdom to ensure the security of personal data. That review will look at Government Departments and other organisations. I can also tell the House that the Comptroller and Auditor General, Sir John Bourn, has said that the National Audit Office will also review its own procedures for requesting data to confirm that they remain in line with best practice, and will apply any lessons arising.
	In addition, the House will be aware of other data security breaches by HMRC—including, at the end of September, the loss of records of around 15,000 people in transit by HMRC's external courier and, in the same month, the loss of a laptop and other material containing personal details relating to HMRC customers. I have therefore asked Kieran Poynter, chair of PricewaterhouseCoopers, to investigate HMRC's security processes and procedures for data handling. I have asked for an interim report next month and a full report in the spring. That review will be conducted in consultation with the Independent Police Complaints Commission and a full report will be made available to the Information Commissioner.
	I express my gratitude to the Metropolitan police for its investigation, to the Information Commissioner for his advice and to the banks for their co-operation in working with the Government in taking steps to protect the public. The House will understand that because the investigation is continuing I am not yet in a position to give a full account of what has happened but I will continue to keep the House informed.
	This is an extremely serious matter. HMRC has a responsibility towards the general public, who entrust it with highly sensitive personal information. It has failed to meet the high standards that should be expected of it. I recognise that millions of people across the country will be very concerned about what has happened. I deeply regret that and apologise for the anxiety that will undoubtedly be caused.
	But let me reiterate: there is no evidence that these data have reached the wrong hands and no evidence of fraud or criminal activity; banks and building societies are putting in place safeguards to protect people's accounts; banks and building societies will continue to monitor those accounts; and no one will suffer any loss if they are innocent victims of fraud. I will, of course, keep the House updated of any further developments. I commend the statement to the House.

George Osborne: The Prime Minister says that the first duty of Government is the protection of the citizen, and today we discover from the Chancellor that the Government are responsible for breaching that duty of protection to 25 million citizens. Let us be clear about the scale of this catastrophic mistake: the names, the addresses and the dates of birth of every child in the country are sitting on two computer discs that are apparently lost in the post; and the bank account details and national insurance numbers of 10 million parents, guardians and carers have gone missing. Half the country will be very anxious about the safety of their family and the security of their bank accounts, and the whole country will be wondering how on earth the Government allowed this to happen.
	The Chancellor has to answer the most serious questions. On the question of safety, what contingency plans have been drawn up with the police lest it become clear that millions of personal details have fallen into the wrong hands? On the question of financial security, I understand what the Chancellor said about the precautionary measures taken by the banks this weekend, and I agree with him that people need not contact their banks, but since he has asked millions of people to monitor their accounts, many may well do so. What steps have been taken by the Treasury, the Bank of England and the Financial Services Authority to prepare for any potential financial instability?
	If fraud does occur—and of course it is good to hear that there is no evidence of that at present—where will the liability for any losses rest? The Chancellor said at the end of his statement that people would not lose out. Does that mean that the responsibility now rests with the Government, and, in effect, is the Chancellor now offering another general guarantee to depositors and people with bank accounts?
	On the question of how this extraordinary security breach could ever have happened, what is the point of the House passing laws to protect the privacy of people's personal information if those laws are not even enforced at the heart of Government? As the Chancellor himself said, this is the third, and by far and away the most serious breach by Her Majesty's Revenue and Customs this year. In August, a laptop containing the personal details of 400 taxpayers was stolen after being left in a car overnight, and 15,000 people's details were lost. [Hon. Members: "He said that."] He did say it, and it is worth reminding ourselves why there has been a catalogue of mistakes at Her Majesty's Revenue and Customs. When did the Chancellor first become aware that the security protocols in his own Department were absolutely worthless, and what did he do about it?
	We know that it was about 21 days before the breach in security was brought to the Chancellor's attention—incidentally, two days after it was brought to the attention of senior management in Her Majesty's Revenue and Customs. Why did the Chancellor then wait for four days before contacting the police? Does he remember just who has been running the Inland Revenue for the last 10 years? The Prime Minister. Can he tell us when he told the Prime Minister about this fiasco?
	Finally, there is the issue of how we stop this from ever happening again. I welcome the inquiries that are under way, but can the Chancellor confirm that the police are investigating not just the individual responsible for sending the discs, but those above that individual who are responsible for ensuring that the law is properly enforced in Her Majesty's Revenue and Customs? Does he agree that today must mark the final blow to the Government's ambition to create a national ID card? They simply cannot be trusted with people's personal information.
	Since he came to office less than six months ago, the Chancellor has lurched from one crisis to another. Now his Department has compromised the security and safety of every family in the land. This autumn, the Prime Minister said he had shown that the Government could be competent, and now needed to set out his vision. There are 25 million people whose personal details have been lost by this Government. Never mind the lack of vision; just get a grip, and deliver a basic level of competence.

Alistair Darling: I think the whole House will agree that the way in which this was handled was inexcusable. HM Revenue and Customs has well laid down and established procedures which were breached, and which there is no excuse whatsoever for breaching. As I told the House, it is a matter of extreme regret that so many people will be caused anxiety as a result of what happened.
	There are two points. First, the police investigation is continuing, and as we ascertain more about what happened, we will be able to learn lessons for the future. Secondly, the hon. Gentleman asked what was being done in the meantime. Senior management have instructed that no information is to be downloaded from computers in this way without the authority of a very senior member of the Revenue and Customs, and that in the event that it proves necessary to make that information available to other people, the procedures will be tightened up.
	It is obvious to me from the information that I have that in the event of the NAO's wishing to audit a large amount of information of this kind, procedures will provide for the NAO to go to where the information was stored rather than its being transmitted. The senior management have tightened up on those procedures so that this does not happen again, but we will obviously want to learn from the conclusions of the inquiry that I have asked Kieran Poynter to carry out.
	The hon. Gentleman asked some specific questions. First, as I have said, the banks have put in place all the precautions they think they can reasonably put in place to guard against any unusual activity. I repeat that neither the police nor the banks have any evidence to suggest that the information has fallen into the wrong hands or that it is being used for fraudulent or other criminal purposes. The hon. Gentleman asks what would happen if a particular set of circumstances were to arise. I hope that he realises that for obvious reasons the police do not particularly want me to speculate on what they might do in the event that they suspect a crime is taking place, but I can assure the House that the Metropolitan police is very aware of the risks and is addressing them.
	The hon. Gentleman also asked specific questions about when I was told and what I did. As I said in my statement, I was told about this on the morning of 10 November and I instructed that there should be an immediate, thorough search by experienced, trained customs officers of every place where the discs might be found. That took place. I also asked that HMRC undertake a thorough investigation of what should happen. However, despite being told on Monday that there was every chance that we would be able to recover the disks—which would, of course, have been the preferable course of action—it was clear to me that that was not going to happen, which is why I asked the Metropolitan police to be called in.
	There was one thing I was very conscious of, and it was why I took advice from the Information Commissioner: that before I made a public statement the House would expect me to do everything I reasonably could with the banks to put in place measures to protect the public. I am sorry if the hon. Gentleman disagrees with my judgment on that, but I think I had a duty to give the banks time to put in place the necessary protections, especially when I was advised that that was the right thing to do by the Information Commissioner and especially when I was told by the banks that they wanted as much notice as possible before this became public knowledge. The hon. Gentleman asked when I told the Prime Minister. Within about half an hour of my being told, I spoke to the Prime Minister. The two of us discussed what we ought to do, and I have kept him informed ever since.
	The last point that the hon. Gentleman makes way in relation to identity cards. The key thing about identity cards is, of course, that they will mean that information is protected by personal biometric information. The problem at present is that, because we do not have that protection, information is much more vulnerable than it should be.
	In conclusion, as I have informed the House, this is a deeply regrettable incident that should never have happened, but I am now doing everything I possibly can to safeguard the public interest because that is the right thing to do.

Vincent Cable: I think I should thank the Chancellor for both his frankness and his apology, but is it not now the case that the Treasury has replaced the Home Office as the Department that is unfit for purpose, and also that he inherited from his predecessor systems of management that are totally dysfunctional?
	On the specifics, how many unencrypted CDs are being posted around Government every year? Since this is the second case within the past few weeks of a CD being lost in the post—the other in relation to insurance data—what is the status of the comment made in respect of the loss of a CD in September by HMRC that it had
	"reviewed our arrangements and introduced safeguards to prevent this happening in future"?
	Why should we have more confidence today that that will be implemented? Can the Chancellor also explain why, in this day and age, information is being transmitted through CDs, rather than electronically? Is that not just a reflection on the ancient IT systems employed by HMRC?  [Interruption.] For example, is he aware that officials within HMRC— [Interruption.]

Mr. Speaker: Order. Let the— [Interruption.] Order. Let the hon. Gentleman speak.

Vincent Cable: Is the Chancellor aware that officials within HMRC are being told to disregard elementary precautions such as dual running of old and new IT systems in order to make savings on the £8 billion Capgemini project? Will he not make an open, transparent statement of the IT position by publishing the gateway review rather than trying to suppress its findings by going to the High Court?
	A basic question one has to ask is why private finance initiative contractors are being given greater data protection than 7.5 million families concerned with child benefit. Is not at least part of this problem due to the 25,000 job losses being implemented in HMRC? Clearly, if officials are being asked to do more and more with fewer staff, mistakes will be made, as they have been here and in relation to tax credits and VAT registration. Is the issue of confidence in Government databases restricted merely to the future ID card system? Is there not a complete lack of confidence in future benefit claims? How on earth are poor people going to have confidence that their data will be protected when they claim benefits?
	Finally, I want to raise the issue of the principles governing resignation from Government when administrative disasters occur. One senior official, Paul Gray, has now resigned as a matter of honour; another, the Metropolitan Police Commissioner, declined to do so. Home Office Ministers have resigned on matters of honour; Treasury Ministers decline to do so. Where does the buck stop in this Government?

Alistair Darling: The hon. Gentleman asks a number of questions and I agree with him that this information should not have been downloaded in the way that it was; it certainly should not have been sent in the way that it was, without any readily available means of identifying where it was. It was password-protected, but that was inadequate. However, the hon. Gentleman needs to bear it in mind that the key problem is that HMRC has clear instructions, rules and procedures on requesting, downloading and transmitting information, and that the individuals concerned ignored those instructions. That is the difficulty, and that is what we need to make sure does not happen again.
	HMRC is operationally responsible for the collection and making of payments. It is, quite properly, independent of Government, because it is involved in dealing with personal data. That is why it is a responsibility, which this House recently agreed to, of a board of commissioners and the chairman. They are accountable to Parliament through me, which is why I am making this statement today, but there is no doubt in my mind that what we have here is an extremely serious breach. It should never have happened, and the problem is that individuals within HMRC ignored the procedures that were there. That should not have happened and that is what we need to put right.

John McFall: Paul Gray, the chief executive of HMRC, has always been co-operative and helpful to the Treasury Committee in our dealings; however, he is correct today to resign from his post. This gives rise to the question, are data safe with Government agencies? No doubt the Treasury Committee will look at this issue, at the internal security procedures operated by departments, and at the level at which the security is signed off. Why does such sensitive information need to be shuffled around? Why cannot the NAO undertake its investigations at the departments? No doubt the Treasury Committee will want to look at this issue, and I ask the Chancellor for his full co-operation in that exercise, so that we investigate this matter thoroughly and ensure that never, ever again does such a situation arise.

Alistair Darling: I certainly welcome any inquiry by the Treasury Committee. My right hon. Friend asks me about the audit procedures and as I told the House earlier, Sir John Bourn, the Comptroller and Auditor General, is reviewing the procedures for how information is handled and what he requests. On child benefit, my understanding is that normally, the NAO would seek to investigate a comparatively small number of cases—perhaps as small as a dozen or so—in order to be sure that Revenue and Customs was following the correct procedures and paying them. It is not at all clear to me why 7 million records would be necessary, or whether it would be possible for anyone actually to look at 7 million records and properly audit them.
	I also agree with my right hon. Friend—I said this in reply to the shadow Chancellor—that if large-scale information is sought, as I understand it, the internal procedures of the Revenue and Customs require that the auditor go to where these things are held, in Washington and the north-east, so that he could look at that information without it being taken out of a secure building. I understand that those procedures are in place. One of the things that the inquiry will have to find out is why those established procedures were breached by the individuals concerned.

Edward Leigh: I am grateful to the Comptroller and Auditor General and to the Chancellor for briefing me this morning. May I just make one or two things clear from the CAG's briefing? He requested this information—the national insurance numbers—to create a sample to enable him to carry out the audit. It is clear that the CAG specifically asked that all personal details, bank account details and all that sort of information should be removed before this was sent. That is the most important thing. The National Audit Office simply asked for the national insurance numbers; this had nothing to do with personal details.
	On the other important point the Chancellor may have inadvertently misled the House—I am sure that it would have been completely inadvertent. He said that this information was sent on 18 October. That is true; the Inland Revenue informed the NAO on 18 October. He then told us that it was not until 8 November that senior management were told that these discs had not arrived. In fact, the NAO informed HMRC on 24 October that the wallet had not arrived. It was sent completely insecurely. A second wallet was then sent, so there is no doubt that the wallet never arrived at the NAO; it was lost in the post. No blame can be attached to the NAO, which was simply doing its job in asking for this information. This is criminally irresponsible behaviour on the part of a Department that once had an unimpeachable reputation.

Alistair Darling: There is one point that I want to address head on, because I take very seriously my duty to tell this House the facts as I understand them. I did say in my statement that a request was made at the beginning of October to provide information for audit. That led to the official concerned despatching the two discs in the way that I described—these are the two that never arrived. I understand that subsequent to that, on discovering that they had not arrived, the same junior official spoke to his counterpart in the NAO to ask whether or not he had received them. As I said in my statement, on discovering that they had not been received he then posted another two copies—this time using registered post. That is precisely what I told the House. There had been further contact after the initial posting on 18 October. The fact remains that my understanding is that senior management of HMRC were not told of this until 8 November.
	That is what I have been told by HMRC, so the hon. Gentleman is right to say that an initial request was made but the discs did not turn up at the NAO. The two officials spoke again and, wrongly, the discs were posted out a second time. This time they did arrive and are, as I understand it, in safe custody. The fact remains that it was not until 8 November that senior HMRC staff were told, and they subsequently informed Ministers. I want to be clear about that.
	On the NAO's original request, I am aware of the position that Sir John Bourn has helpfully set out for me. I have also received advice about what HMRC thinks it was asked for. One of the reasons that I want Kieran Poynter to investigate is to reconcile the sometimes differing accounts of what happened. I have been at pains not to allocate blame as between the NAO or HMRC. I have no reason to criticise the NAO and I welcome the fact that Sir John Bourn is carrying out his own inquiry. I am sure that he will share his conclusions.
	I wanted to clarify the position. I understand perfectly why the hon. Gentleman wants to make the position of the NAO clear, but I know that in my statement I acquainted the House with what happened to the best of my understanding.

Tom Levitt: My right hon. Friend is to be commended for his statement, which was responsible and proportionate. May I especially commend him for having given the banking system time to consider the situation without panicking and to prepare for what will be a demanding few days as people seek reassurance? I am sure that major banking institutions will be fully prepared, but can he assure the House that the smaller banks and building societies have the capacity to deal with customer demand over the next few days, especially Post Office branches in the high street, when the public seek the reassurance that they no doubt will?

Alistair Darling: Certainly HMRC will do everything that it can, together with the associations representing the banks and building societies, to help them and the Post Office prepare. As I said in my statement, I was conscious of the balance that I had to strike between telling the House and the public, and allowing sufficient time for preparation by the banks. Some small institutions asked for a couple of weeks, but it was my judgment that I had to make the information public as soon as was reasonable. I also had to do my best to ensure that the banks were given sufficient time. I have tried to strike that balance and I hope that the House will understand that. As I said earlier, the view of the banks and the building societies is that there is no need for people to contact them unless they have seen something suspicious. Because the bank accounts are being monitored—they have been flagged since the weekend because of the information that we gave the banks—the process is well under way, although we will obviously help some of the smaller institutions if they need and request that help.

Douglas Carswell: If the Government have managed to lose 25 million confidential personal records in this way, how can we possibly trust them to run an ID card scheme nationally?

Alistair Darling: As I said, one of the problems is that the information we have at the moment can, in certain circumstances, be used for fraudulent purposes by people who have no right to use it. The point about ID cards is that because they will introduce biometric information they will mean that one can be more certain that the person asking for or dealing with that information has a legal right to do so.

George Mudie: The general public, hearing about this, will be less concerned about whether the NAO or the Treasury were to blame and more concerned about the embarrassment of their records being public, the threat of identity theft and what protection they will get if it occurs. Can the Chancellor spell out what protection the public will get from the various banking codes if identity theft happens?

Alistair Darling: On the central point, there is no information suggesting that the information is in the wrong hands or, indeed, in the public domain. It is password protected. The police, who are constantly monitoring the situation, tell me that there is no reason to believe that the information has come into the hands of people who should not have it. As I said to the House earlier, the fact that the banks have been able to flag and monitor the accounts concerned means that if unusual activity occurs, it can be picked up. Individuals will also look at their own accounts. At the moment, there is no reason to believe that the information is in the public domain or that there has been any fraudulent or other criminal activity. However, the banks, the Government and everyone else will continue to do everything that they can, first to recover the information and then to put those protective measures in place.

Richard Bacon: It is hard to know where to start with the Chancellor. He prays in aid the Information Commissioner, but it was the commissioner who told the Government to publish the gateway reviews for ID cards, so why did he not listen to that? Moreover, Sir John Bourn has qualified HMRC's accounts for the past four or five years, not because of any fault on the part of that Department but because it is being required to implement the Government's unimplementable tax credit policy. Paul Gray is a courteous and honourable man; what I fail to understand is why he is the only one offering his resignation.

Alistair Darling: I agree that Paul Gray is an extremely courteous and hard-working civil servant who has served successive Governments very well indeed. From my time in government with the Treasury and the Department for Work and Pensions, I know that he has served all Departments with distinction. He deeply regrets what has happened but he is chair of HMRC's commissioners, who were established by statute, and he accepts that he has a responsibility in this matter. I am sorry about what has happened, just as he is, but the important thing is to make sure that such a massive and unforgivable mistake does not happen again. We must learn from it, and ensure that proper procedures are put in place to protect the public.

Si�n Simon: Notwithstanding the sad but not surprising sanctimony displayed by those on the Opposition Benches, does my right hon. Friend agree that what has happened is the sort of random, human mistake, in breach of all guidance and rules that occurs under all Governments of all colours? The test of the Government is how they deal with it. The Chancellor has told us what he has done, but will he now say whether any requests for co-operation or compliance from the police or any other investigating authority have been refused by the Government? Is there anything that he could have done that he has not done?

Alistair Darling: No. All requests made of the Government have been met in full. Where we have not been able to do that immediately, we are working with the relevant authorities to make sure that we put in place what is needed.

Peter Robinson: First, may I express the hope that the lost data might be found even now? If that happens, the problem can be treated as an exercise, with HMRC and other Departments looking at their procedures very carefully and changing them where necessary to ensure the safety of data transmission. Given the scale of problem, will the Chancellor say whether all parts of the UK are affected or whether any geographical importance can be attached to the data that have been lost? Will he also say

Mr. Speaker: Order. Hon. Members may ask only one supplementary question.

Alistair Darling: I believe that the information that has been lost covers all recipients of child benefit. I know that the system in Northern Ireland is administered separately, but I am proceeding on the basis that all child benefit recipients are affected. As I said earlier, the police are still investigating, and that includes checking the precise details of what was taken off the computer. However, the information that I have today suggests that it is best to assume that recipients from all parts of the UK are affected, and not only those from Scotland, Wales and England. I am afraid that we will have to proceed on that basis.

John McDonnell: It is clear that my right hon. Friend has taken prompt and decisive action from the time that he was informed of the mistake. As chair of the Public and Commercial Services trade union group, I am aware of the representations made to the Treasury in respect of concerns about management and the management systems that have been put in place, and about the impact of job cuts in HMRC. Will my right hon. Friend therefore meet the PCS group to discuss those matters of concern?

Alistair Darling: I know that the PCS has been extremely helpful in facilitating police interviews with members of staff who, like everyone else, are anxious to recover the items that have been lost. We are all grateful for that, and HMRC staff have behaved entirely in the way that one would expect from public servants. General staffing questions should be directed to my right hon. Friend the Financial Secretary to the Treasury, who has day-to-day responsibility for HMRC. I am sure that she will be happy to discuss them with my hon. Friend.

Peter Lilley: This calamitous breach of privacy occurred during the transfer of information between two public departments. Given that the national database behind the identity card system exists precisely to transfer and aggregate information between a great many departments, can the Chancellor give us an assurance that we will not proceed with that proposal without first carrying out a proper review of the privacy implications, especially in the light of the fact that the Australian proposal for an identity card foundered precisely on concerns about privacy?

Alistair Darling: As I said in my statement, there are a number of things we need to consider in relation to the holding of data by Government and the transfer of that information, which is why my right hon. Friend the Prime Minister asked for a report into the matter. In relation to this problem, as I have said on a number of occasions, it should never have been dealt with as it has been, and no one can possibly excuse the way in which the information was sent through the post. There are clearly a lot of lessons to be learned, and I am determined that we do just that.

George Howarth: Given that ultimately any system is vulnerable to human error, will my right hon. Friend consider during his various reviews of the problem whether it would be prudent for such databases to be encrypted in future?

Alistair Darling: That is certainly something we need to consider, because it is possible to encrypt information at present. My starting point is that in general if an auditor, or anyone else, wants to look at a large amount of information, it is best to do so where the information is stored so that we do not have to send it in the first place; but if information has to be senteven if it is only a small amount concerning a small number of people, or an incomplete picture of someone's circumstancesthere is something to be said for encrypting it so that it can be kept as secure as possible. Let us be in no doubt: the public entrust the Government, or their agencies, with personal information and they expect that information to be safeguarded with as much security as we can possibly manage.

Iain Duncan Smith: The Chancellor said that he reckoned that the department was independent of his Department so in that sense it was enough for Paul Gray to resign, but it was to the Chancellor that HMRC came; it was herightlywho took the decision for a full search and then to call in the police, and it was he who has had to come to the Dispatch Box to explain it all. Does not that make it certain that he and his Department have absolute overall responsibility, so if the information gets into the wrong hands, would he consider it right that either he or his Financial Secretary should take the decision to resign?

Alistair Darling: The House debated the structure of HMRC recently when the two organisations merged. HMRC was set up as a body independent of Government, mainly to keep Ministers of whatever Government away from the business of collecting people's money and paying out money. It has always been understood that although Ministers are responsible for policy, operational matters should be kept away from them for perfectly understandable reasons. HMRC is unusual: the body is run by a chairman and a board although it is clearly accountable to Parliament through Ministersin this case, me. Of course, given the seriousness of what has happened, I took a very real interest in the matter right from the time it was drawn to my attention.

Nigel Griffiths: Although the Chancellor has said that the information should never have left the building and, indeed, that it was security protected, will his review look at ensuring that the highest level of security protection is now applied to all appropriate sensitive data?

Alistair Darling: Yes, we must do that. As I said a moment or two ago, if sensitive information is to be taken out of a building, it must be transmitted as securely as possible. I suspect that there will be a number of different ways of doing that, but it is critically important and it is what the public expect.

Richard Younger-Ross: Is the Chancellor aware that security codes and passwords can be broken? The Apple iPhone code was broken within a day of its launch in the UK. Considering the ability of criminals to breach codes and passwords, what advice has he received from the Metropolitan police about the likelihood of identity fraud if the data should fall into the wrong hands?

Alistair Darling: I agree that we need to make sure that as much security as possible is attached to any transfer of information. Part of the purpose of Sir John Bourn's review is to consider, for example, how many cases need to be seen when carrying out perfectly legitimate audit requirements and what information he actually needs to see. Sir John will want to consider those points and discuss them with HMRC and other Departments. In relation to HMRC, if information is requested, consideration has to be given, as already required by the guidelines, as to whether an auditor should be invited to look at the information in the place where it is held or, if it is sent, what precautions should be attachedwhether encryption, password protection or whatever. I understand that all those things are provided for under existing requirements, but what happened in this case was that the existing procedures were not followed at each and every stage.

Geoffrey Robinson: Is the Chancellor aware that the whole House is, naturally, seized of the gravity of the breaches in procedure that have taken place, but recognises, equally, that he in his office has acted with great dispatch and decisiveness in dealing with this difficult situation? May I associate myself with his tribute to Paul Gray, whom I knew when at the Treasury? He is a civil servant of distinction, but his resignation was necessary in the circumstances, as he readily saw. In involving the police, the Chancellor clearly did the right thing and acted immediately in that respecta similar thing is true of looking at the systems. May I put a point to him on the question of the transmission of data? However we transmit data, somebody has to take the decision. With information of this kind, should not two or three levels of officialsgoing, where necessary to the very tophave to be involved?

Alistair Darling: I agree with my hon. Friend's remarks concerning Paul Gray. I also agree with what my hon. Friend said about the transmission of this type of information. Revenue and Customs has now put in place procedures that require access and transfer to be approved at the very highest level of the organisation. It is quite clear from what has happened that that needs to be applied in the future as well. It cannot be left to someone at a junior level in the organisation to decide whether information, especially information of this nature, should be downloadedand then, in this case, posted in a way that was totally insecure.

Andrew Robathan: The Chancellor has given my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and my hon. Friend the Member for Harwich (Mr. Carswell) reassurances that any personal information stored for ID cards will be safe. However, after this astonishing display of incompetence, why would anybody have any faith in the Government or trust them to be able to keep personal information secure?

Alistair Darling: For the reason that ID cards match up biometric information with the information that is held, so that the person holding the information knows that the person asking for it is legally entitled to it. That is the difference between many other systems, which do not have that biometric lock, and the ID card system, which would have that biometric lock. It seems to me that that would give me and the hon. Gentleman, as individuals, far more protection than there is at the moment.

Helen Jones: The Chancellor acted promptly to ensure that the banks had systems in place to deal with the matter before it became public. However, he will be more aware than any of us that, now the matter is in the public domain, all sorts of people will try to work various scams through the internet and by telephoning people, claiming to be acting on behalf of the banks, to get personal information. What discussions has he had on alerting members of the publicsome of whom may be in very vulnerable positionsto that possibility, to ensure that they do not give out personal information in response to those sorts of request?

Alistair Darling: My hon. Friend raises a perfectly good point. I said in my statement that people should be very wary if they receive unexpected phone calls or e-mails asking them for personal information. As I think we are all aware, that can happen anyway, but that is especially the case at present. Revenue and Customs is writing to all recipients of child benefit to explain what has happened, to set out what people need to do and to assure them that they will get their child benefit payments in the normal way. The letter says that if people do receive any unusual requests, they should decline to give the information until they are absolutely sure that the request is coming from the right place.

Stewart Hosie: This was a catastrophic loss of security and a fundamental breach of trustso much so that Paul Gray resigned, which is honourable. I am concerned that the error made in March was fundamentally allowed to be replicated in October. I am concerned that the lost data, sent on 18 October, were not reported to the police until 14 November. However, I am most concerned about the system failure, including as regards the implementation of guidelines, which allowed a junior official to copy the entire child benefit database on to a disc and post it, unregistered, to anyone. The Chancellor said that he will work with the Treasury CommitteeI have spoken to its Chairand I hope that when he does he will raise the matter of process quickly, particularly the process whereby procedures are put in place to ensure that there is ministerial oversight and sign-off of all security matters

Mr. Speaker: Order. I call the Chancellor.

Alistair Darling: The procedures were there. I am not saying that they cannot be improved; indeed, I am sure that they can be improved. As I understand it, the problem was that the people concerned did not follow the procedures. That is why we have the problems that we do. The senior management of HMRC are making sure that there are very clear instructions and that tighter procedures are in place. The reason that I asked Kieran Poynter to carry out his investigation and to provide me with an interim report next month is that improvements are necessary; that is beyond doubt, and I entirely agree with the premise underlying the hon. Gentleman's question.

Paul Farrelly: I, too, commend the Chancellor for his prompt and candid statement. I echo the sentiments of my hon. Friends the Members for High Peak (Tom Levitt) and for Warrington, North (Helen Jones) about the responsible way in which he allowed the banking sector time to prepare. May I ask my right hon. Friend, before the press do, who is bearing the cost of flagging the accounts and analysing transactions within the industry?

Alistair Darling: The banks have put in place those procedures; they have them. There have been data losses from time to time, so that is something that they are concerned with at the moment. We will continue to discuss with the banks what is necessary to safeguard people's interests in future.

David Heathcoat-Amory: What other organisations or agencies connected with central or local government are in receipt of, or have access to, any personal tax or benefit data held by Revenue and Customs?

Alistair Darling: All tax records will be the responsibility of HMRC, but there are procedures that lay down access to, or exchange of, information. That is governed by primary legislation in many cases, and by the Data Protection Act 1998, which has clear instructions on what can and cannot be done. There are also internal procedures. The inquiries that I announced today will look at those things. We need to make sure, first, that they are adequate to the task, and secondlyand equally importantthat procedures are followed to the letter.

Anne Snelgrove: It is clear that my right hon. Friend has struck a good balance between giving banks, building societies and the police time to do their work and informing the House. I welcome the appointment of Kieran Poynter to look into HMRC's processes. What is being done to ensure that our constituents' details are kept safe until the report is presented?

Alistair Darling: First, as I have said on a number of occasions this afternoon, there is no evidence that the information has fallen into the wrong hands, and the searches for it will continue. I set out the procedure and processes that have been followed by the banks in relation to flagging accounts. I have also said that Revenue and Customs has put in place a very tight regime that will prevent information from being downloaded or transmitted without its being signed off at a very senior level. I hope that both those measures will provide some reassurance in what is clearly a very difficult situation.

Michael Fallon: Another day, another incompetence. If the Chancellor knew on 10 November, can he tell the House on which date he alerted the banks, and why he dithered for four days before calling in the police?

Alistair Darling: I am not sure whether the hon. Gentleman was present during my statement. I said that on 10 November, when I was told about the matter, I immediately asked that there be a thorough search. That search was carried out by trained Customs officials who are used to looking for missing items. I was told on the Monday that people were optimistic that we would be able to find the package, but by Wednesday it was clear that that would not happen. That is when the Metropolitan police were called in. At the same timethis is an important matterI was acutely conscious that we had to give banks time to put in place sensible precautions before it became public knowledge that the information was out there. The banks said that they needed time to put in place proper defences and it would have been wrong of me to ignore that advice.
	I also said in my statement that I discussed the matter with the Information Commissioner, who was clear about two thingsthat the information had to be made public, but only after we had had an opportunity to talk to the banks and put in place such protective measures as were appropriate and could be put in place. I believe that I struck the right balance between a duty to tell the House what had happened, and a general duty to protect the public interest as much as I possibly could.

Mike Hall: I welcome my right hon. Friend's statement about a matter which is a serious breach of the Data Protection Act. May I press him on the role of the National Audit Office? What I would like to see come out of the inquiry is the nature of the information that it requested, whether that request was compliant with the Freedom of Information Act and the Data Protection Act, and at what level the decisions were taken. There is always a responsibility on the people requesting information to be sure that they are legally entitled to have the information that they have asked for.

Alistair Darling: That is something that we need to establish. As I said in reply to a question from the Chairman of the Public Accounts Committee, the hon. Member for Gainsborough (Mr. Leigh), we need to establish who was involved at the NAO and HMRC, at what level, what they were asked for and how that request was responded to. One of the things that Sir John Bourn wants to examine is the nature of information that is asked for in future, as well as the handling of those requests and of the information if it is to be made available. It is entirely sensible that we should do that.

Peter Viggers: It is appropriate that the Prime Minister should be present, because the whole tax credit system is a product of his over-fertile brain. We have long known through constituency experience that the situation is irredeemably complicated, but the present circumstances have shown us that it is also unduly intrusive. Will the Chancellor of the Exchequer undertake to look at the system again from first principles?

Alistair Darling: The matter does not concern the child tax credit. It concerns child benefit, which is a different benefit. I should have thought that the hon. Gentleman knew that.

Several hon. Members: rose

Mr. Speaker: Order.

Points of Order

Daniel Kawczynski: On a point of order, Mr. Speaker. I have been working for a considerable time with representatives of Shrewsbury borough council to ensure that the brave servicemen and women from Shropshire who have served in Iraq and Afghanistan are given an appropriate civic reception to honour their bravery. Today we have been informed by media operations staff at the Ministry of Defence that they will not allow those service personnel to come to the civic reception which I am organising on 29 November because they claim that, as an MP, I am a politician and it would therefore be a political event. I find that disgraceful. We as Members of Parliament must do everything possible to ensure that our brave servicemen and women are recognised for what they have done. Would you please ensure that a Minister comes to the House and gives proper guidance in the matter?

Mr. Speaker: That is not a point of order, but I will tell the hon. Gentleman how I would do it. Get the Lord Mayorin Glasgow it would be the Lord Provostto run the civic reception. That makes it non-political and, of course, a local Member of Parliament can be there to welcome the troops back. That would be the way to do it. It was not a point of order. I am just giving the hon. Gentleman a bit of advice.

Philip Davies: On a point of order, Mr. Speaker. During the statement that we have just heard from the Chancellor, no mention was made of the potential threat to child protection

Mr. Speaker: Order. I will not extend a statement that has been made. I am sorry that I did not call the hon. Gentleman, but that's the way the cookie crumbles, as they say in America.

Orders of the Day

Channel Tunnel Rail Link (Supplementary Provisions) Bill

Order for Second Reading read.

Tom Harris: I beg to move, That the Bill be now read a Second time.
	The channel tunnel rail link, or High Speed 1, is now openon time and on budget. Passengers can now travel the 68 miles from St. Pancras to the tunnel at speeds of up to 186 mph. The journey from London to Paris can be made in two hours 15 minutes, and the one from London to Brussels in one hour 51 minutes.
	From December 2009, domestic journey times will be slashed for commuters living in Kent, with the arrival of a new fleet of trains. London and Continental Railways, or LCRthe company that built the rail linkestimates that the project will generate an additional 10 billion of private sector regeneration investment along its route. Management of construction has been a tremendous success. In part, that is down to the structure in place: the corporate and contracting structures and the roles played by all stakeholdersLCR, the Government and a range of other partners. However, managing a construction project is not the same as managing a railway. The Bill makes a small number of changes to support a restructuring and make sure that the future structure is as effective as the existing one.
	In 1996, London and Continental Railways won a contract to design, build and finance the channel tunnel rail link. That, however, was only the beginning of the story. The fact that the line runs from Kent to St. Pancras today is in no small part thanks to the efforts of Michael, now Lord, Heseltine. His focus on regeneration led to the rerouting of the original alignment under south London and enabled St. Pancras station to become the monument to British engineering that it now is.
	In 1996, LCR and the Government signed a number of deals, of which the most important is the development agreement; LCR acquired not only the UK arm of the Eurostar joint venture, but brownfield development land around King's Cross and Stratford. The first part of High Speed 1 opened in 2003 and the second section opened last week. The 1996 financing plan was to borrow against Eurostar revenues; it soon became clear, however, that those revenues would not give lenders enough security.
	Unwilling to see the project fail, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), then Deputy Prime Minister and Secretary of State for the Environment, Transport and the Regions, led a rescue bid in 1998. That comprehensive restructuring exercise secured the project's future; without my right hon. Friend's intervention we would not have celebrated the opening of St. Pancras earlier this month. My right hon. Friend's role was pivotal. Without his efforts, it is clear that High Speed 1 could not have been built. It stands today as an outstanding legacy to his political career. I hope that the House will recognise his achievement.
	The National Audit Office concluded that the restructuring was well thought out and helped to maintain private sector discipline over cost. The arrangements that were put in place have now proved their effectiveness, as the project was completed on time and within budget. As planned, the new railway is fully open and the Eurostar services moved successfully from Waterloo to St. Pancras International overnight last week. I take this opportunity to thank everyone who played a part in that.
	Government support will always be needed to fund major rail projects, but given the investment made by taxpayers, we now need to get the best possible return. In 2006, after speculation about the ownership of LCR, its shareholders decided that at that point they did not want to sell their interest in the company. However, as was announced to Parliament in March last year, the LCR board and the Secretary of State agreed to undertake a joint programme of work to evaluate potential restructuring options. The objective of that work was to identify and implement a future structure for the company that was affordable and maximised value for taxpayers. The work is not yet complete, but we have made significant progress.
	A separation of LCR's three different businesses is plannedthe infrastructure, including the track and stations, the land interests and the UK stake in Eurostar. Ultimately, as the Secretary of State said last year, we anticipate that there will be an open, competitive process for any sale, to secure best value for the taxpayer. The Bill is the first step towards that. Outside the Bill, a number of regulatory approvals must be granted.

Damian Green: The Minister makes the important point that when the sale happens he will seek to gain the best value for the taxpayer. Can he cast some light on whether the Department will also have some regard for the travelling public who use the line, particularly in Kent, because one can imagine circumstances in which there would be a genuine tension between those two demands?

Tom Harris: I can assure the hon. Gentleman that any restructuring processindeed, any wider policy of the Departmentwill make the interests of the travelling public an absolute priority. I understand that he has concerns about the service pattern of Eurostar as it affects Kent, and he may want to say something about that later.

Stephen Ladyman: While my hon. Friend is on the subject of the travelling public, he will know that my constituents are very much looking forward to using the domestic high-speed service. Many of them will want to go to Stratford international station and then get on to the docklands light railway to go into the City, as will be possible from 2010. Others will want to transfer from Stratford international station to Stratford domestic station to get on to the Jubilee line. Those two stations were supposed to be linked by a travolator, but I understand that there are now some second thoughts about whether that will be constructed or whether the link will be delivered in some other way. Will the arrangement that he is proposing make it more or less likely that we will get that essential link between the two Stratford stations?

Tom Harris: That was an ingenious intervention by my hon. Friend. The short answer is that I am afraid that the Bill will make absolutely no difference to whether the travolatoran inelegant word if ever there was onewill be constructed. He is right that the requirement to build a mechanical link between the international and regional stations at Stratford was part of the original planning consent. He will perhaps already know that plans are now in place to build an access route from the eastern side of the station that will require passengers to walk about 200 m, and the procurement process to identify a suitable contractor is under way.
	Outside the Bill, there are a number of regulatory approvals that must be granted, but if the timetable proceeds as we anticipate, the most significant saleof the rail infrastructureis likely to take place in 2009.

Eric Martlew: We have had all sorts of problems with Railtrack in the past; now we have a unified railway system under Network Rail, with the exception of this line. Will Network Rail be able to bid to bring the line into the national network?

Tom Harris: The answer is yes. However, I will not speculate about who might ultimately win that particular bidding process.
	The Bill, though short, is the first visible step in the restructuring work package. Our work with LCR identified that High Speed 1 might be subject to two existing pieces of legislationthe Channel Tunnel Rail Link Act 1996 and the Railways Act 2005. As a result, there is a risk that legal or regulatory uncertainty about how the legislation interacts could jeopardise the Government's ability to get the best price. The first clause confirms that the Secretary of State's powers under the 2005 Act to provide financial assistance can be applied in relation to High Speed 1 and the train services that run on it.
	The second and third clauses change existing provisions in relation to the regulation of the line, which is exempt from economic regulation by the Office of Rail Regulation. However, the Secretary of State has certain regulatory duties in relation to HS1, such as setting an access-changing framework and ensuring fair and non-discriminatory terms of access to the railway. There are some areas where the duties of the Secretary of State and the ORR overlap, or could overlap, and the Bill clarifies who is responsible for what and allows the ORR to recover the costs that it reasonably incurs when exercising its function and duties in relation to CTRL or HS1.

Peter Soulsby: Does the Minister accept that while there has been an understandable focus on the enormous success of the passenger facilities that will be available with the reopening of St. Pancras, there needs to be an equal focus on the potential use of the rail link for freight? That has been a much less successful development, with, at times, as few as one train a day using the line for that purpose, and that needs as much attention in future as the successful passenger-related developments that have already taken place.

Tom Harris: My hon. Friend makes a valid point. I know that he takes a close interest in rail freight matters. High Speed 1 might be appropriate for freight usage. The Government's hope is that decisions about access to High Speed 1 will be taken on a completely commercial basis. He is right to point out that the recent history of through-tunnel rail freight has been a difficult one, certainly in relation to the charging regime for travel through the tunnel. The Government have been trying to work that problem through with the owners and the rail freight companies. My hon. Friend is absolutely right that there is no reason why domestic freight should not use High Speed 1 in the future.
	The Bill amends the statutory definition of development agreement in the Channel Tunnel Rail Link Act 1996 to include the word operation. We are now starting to see the full extent of this project's value to the UK taxpayer. The financial receipts from any sales are likely to be significant, but the benefits of the rail link are wider than any simple financial transaction. LCR estimates that the new line is facilitating 10 billion in private investment in some of the most deprived areas of the south-east. King's Cross Central is a 27 hectare former goods yard that will accommodate new-build homes and reused warehouses, shops, offices and leisure facilities. Taxpayers will receive an agreed proportion of the proceeds from that development.
	In Stratford, a 30 million sq ft development, including a new station, shopping centre and accommodation for athletes, will support the successful staging of the Olympic games in 2012. Journey times to the continent have been cut by at least 40 minutes, compared with before HS1 was built, and through tickets are now available from regional stations across the UK.

Rob Marris: My hon. Friend talks about through tickets from regional stations and the regeneration effects of HS1. Bearing in mind that his constituency is on the west coast main line, as is mine and that of Madam Deputy Speaker and several other hon. Members present, can he say when we might see HS3 serving that line so that people outside the south-east can quickly get to the continent if they wish to do so?

Tom Harris: I am grateful to my hon. Friend for that very helpful intervention.  [ Laughter. ] We have plenty of time, Madam Deputy Speaker, but I am not sure that you would want me to digress to that extent. However, since the question has been asked, the channel tunnel, which was first suggested as a genuine capital project that would actually go ahead in the 1980s, gained support in the House because there was a commitment to link it via high-speed lines to points throughout Great Britain. My hon. Friend is absolutely correct about that. Subsequently, in the late 1980s and early 1990s, the then Conservative Government decided that direct high-speed links to the channel tunnel would not be providedI am not making a political point here; this party supported their decision.
	To bring the House completely up to date, it is a matter of record that our party's 2005 manifesto committed the Government to considering the case for high-speed links from north to south, and we have done that as part of the process leading up to the publication of our White Paper, Delivering a sustainable railway, in July. The Government concluded correctly that although there may be a case in the medium to long term for high-speed lines as a way of meeting additional capacity demands, there was not as strong a case for them with regard to connectivity and journey times, given that Great Britain is a relatively small island. That discussion is still ongoing in the Government. We will make further consideration of the case. I hope that whoever is in this job in 2012 will make a relevant announcement at that time, in the run-up to the high-level output specification planned for publication in that year that will cover the control period from 2014 to 2019.

Gordon Prentice: My Friend or his ministerial colleague told me that the Government would not consider extending HS1 north until 2012. That is a tragedy because its extension would make a transformational impact. I have just come back from Taiwan, where a high-speed railway was opened in April. All domestic flying has stopped in Taiwan because it makes sense for people to travel on that railway.

Tom Harris: I am grateful for my hon. Friend's brief travelogue, but I must emphasise that, in the context of connectivity in the United Kingdom, the case for high-speed lines is not as strong as it might be in other parts of the world. I do not accept that the high-speed line is, of itself, necessarily a good thing. There must be other economic and environmental reasons for such a line. It is a vast financial commitment over a long time, with certain consequences such as blight. Ultimately, travel times in Great Britain are comparable with some of the times that are achieved for similar distances between cities and other locations on the continent. I have not ruled out the prospect of more high-speed lines in Great Britain, but they must be considered on the basis of whether they benefit the economy and meet the demands of increasing capacity in the next 10 to 15 years.

Adam Price: Given the Under-Secretary's comments and the fact that people in the north of Scotland and in my constituency in the west of Wales currently and for the foreseeable future derive no direct benefit from the channel tunnel rail link, why is it still regarded as a UK-wide project? Why is Government funding under clause 1 excluded from the operation of the Barnett formula? Why that exclusion when we do not receive any direct benefit from the line in Wales or Scotland?

Tom Harris: We are considering the first high-speed line to be implemented and inaugurated in our country and our capital city. I do not perceive any benefit in following the nationalist, narrow-minded dead end that the hon. Gentleman's comments suggest. To describe a high-speed line from St. Pancras to the channel tunnel as some sort of parochial benefit for the south-east is the worst form of nationalism. Nationalism takes many bad forms but that is one of the most small-minded attacks that I have heard since I gave an interview to BBC Radio Scotland two weeks ago.

Stephen Ladyman: The discussion is becoming terribly negative. I have worked out that my constituents in Ramsgate will be able to get to Leeds in four hours, including the time it takes them to change trains at St. Pancras, on the new service. We should celebrate that, not criticise it.

Tom Harris: I am grateful to my hon. Friend for again bringing the debate back on track. We should celebrate High Speed 1. More than 8 billion has been spent on upgrading the west coast main line, slashing journey times between London and Glasgow, which will have a knock-on effect on people in Glasgow, including in my constituency, who want to use the west coast main line to travel to King's Cross and Euston, then go to St. Pancras for their onward journey to the continent. That is unalloyed good news for the whole of Britain, especially the British rail industry.

Peter Soulsby: I want to revert to the pressure that has been put on my hon. Friend to consider other high-speed links in the UK. He has talked about the excitement that opening High Speed 1 has generated. Given the genuine excitement, the continuing and growing concern about climate changeand the effect of other modes of transport on thatand the ever-increasing congestion on existing lines, is not now, rather than 2012, or who knows when, the time to consider other high-speed links? We would thus capture the excitement of the moment.

Tom Harris: I add a note of caution to my hon. Friend's comments. The environmental case for a high-speed line is often overstated and painted in black and white terms. Pushing any train up to significantly higher speeds takes great increases in energy, which has to come from somewhere. I return to the point that I made earlier. Connectivity cannot always be addressed by high-speed rail in a country the size of Britain. Given that the journey times between most of the major cities in Britain are already fairly modest, we are left with the conclusion that the main argument for new high-speed lines lies in the need to meet the increased expectation of higher capacity in the medium and long term. The Government are committed to considering that option. I hope that my hon. Friends and hon. Members in all parts of the House will accept that as a reasonable and mature strategy to pursue.

Peter Soulsby: I thank my hon. Friend for giving way again. Does he not accept that the energy necessary to get those high-speed trains up to speed is worth expending if they get people off domestic airlines and make rail a realistic alternative for them?

Tom Harris: Take, for example, the journey from London to Manchester as it stands currently. Even without high-speed lines, rail already has the majority share in that market. Once the west coast main line is finally upgraded, I expect that advantage to increase.
	The Government are not in the business of telling airline passengers that they should not use airlines. We want to ensure that realistic alternatives are available when people make a judgment about which form of travel to use. Thanks to our investment in the wider rail industry over the past 10 years, and in the west coast main line in particular, people in this country have a realistic choice of whether to travel by train, rail or car. That was not always the case. Before 1997, and certainly 20 years ago, most people did not have a choice between rail travel and air travel. They now have a realistic alternative to travelling by air, and more are choosing railways even without the high-speed lines.

Rob Marris: My hon. Friend is being very generous in giving way. Given his background, can he tell me of a single Member of the House representing a constituency in Glasgow who takes the train more than once a month to get from his or her constituency to the House and/or back?

Tom Harris: I would not want to speak for any of my colleagues representing the first city of Scotland, but I can tell my hon. Friend that I certainly use the railway to get from Glasgow to London every Monday morningalthough that is a hostage to fortune. I use the train whenever possible, which works out at three times every month at least.
	Local people in Kent will experience reductions in journey times to London from the end of 2009, with travel to Folkestone and Canterbury estimated to take about an hour. The brand new fleet of class 395 Hitachi trains will also be used to deliver the high-speed Javelin service during the 2012 Olympics, travelling from St. Pancras to Stratford in just seven minutes. The Bill sets in motion a restructuring package that will optimise value for money for taxpayers and put the railway on a firm financial footing for the future. I commend it to the House.

Stephen Hammond: Today we have the Second Reading of the Channel Tunnel Rail Link (Supplementary Provisions) Bill. It is a small Bill of only six clauses; none the less it is a difficult Bill and to some people almost impenetrable. However, behind it lies a unique British achievement: the channel tunnel rail link or High Speed 1, as we are now to call it. The first service left St. Pancras last week to universal acclaim, achieving recognition from all the national newspapers; indeed, even the  Evening  Standard put it on its front page. Those of us who attended the opening ceremony the previous week will remember for a long time the excitement and sense of achievement that we experienced that night. The crowning achievement is surely the reinstatement of the single span roof.
	As the Minister rightly said, the contributions of Lord Heseltine and the right hon. Member for Kingston upon Hull, East (Mr. Prescott) are to be saluted. We on the Conservative Benches should also like to offer our congratulations to Mr. Rob Holden of London and Continental Railways and his team at the channel tunnel rail link on completing the project on time and on budget. We would also want to salute, as did the Minister, the efforts of all those who moved operations seamlessly overnight from Waterloo to St. Pancras. That was a major success and when the first train rolled out last week, it was a huge achievement.
	High Speed 1 now stretches from the mouth of the channel right the way through the Kent countryside into east London via Stratford, terminating at St. Pancrasa total of 109 km or 67.7 miles. Although the London St. Pancras to Paris Gare du Nord service will be the main focus at the moment, we should not forget that about 40 per cent. of the capacity is being reserved for high-speed domestic services. Clearly, that will be a huge advantage for the commuters of Kent.

Stephen Ladyman: I am glad that the hon. Gentleman has recognised the benefits of the domestic services to my constituents in Kent, but may I gently remind him that when the Conservative Government left office, they had no plans for a domestic high-speed service? In fact, they had ruled them out. It was my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) who insisted that there must be a domestic service on the CTRL.

Stephen Hammond: I thank the hon. Gentleman for that, but let me remind the hon. Gentleman that on 20 February 1996, it was the Conservative Government who had the vision and awarded the contract to put that in place. They awarded the contract to London and Continental Railways to build and operate the channel tunnel rail link. Who would have dreamed that we would see 186 mph travel from the UK to France and beyond, as well as on domestic services? Certainly anyone using domestic services at the moment could hardly have dreamed of that.

Rob Marris: Given the vision of the Conservative GovernmentI absolutely salute that vision for the channel tunnelwhat are the hon. Gentleman's views on the possibility of High Speed 3? If his party were in government, would they support it and, if so, would they put any public money into it?

Stephen Hammond: I am delighted to respond to that intervention. I know that the hon. Gentleman is a keen student of our policies, not to mention explanatory notes, so I am somewhat surprised that he does not seem to have noticed that we have already said and confirmedit is in Conservative party policythat an incoming Conservative Government will conduct a feasibility study for HS3.
	As I understand it, the Bill is intended to make minor amendments to current arrangements. There is a belief that the structure of London and Continental Railways, which has contributed to success in construction and delivering the project, may not be the best on an ongoing basis and for its operational purposes. As the Minister said, the Government and LCR have thus undertaken an evaluation of available restructuring options. The Bill is being enacted so that that process can happen.
	As the Minister stated earlier, the Government believe that splitting LCR into its component businesses is the best way forward, so the Bill introduces a small number of measures to clarify the legislative and regulatory status of High Speed 1. The Government believe that, without their intervention and the Bill, there would be risk of legal and regulatory uncertainty. In Committee, we will look to the Government to clarify, quantify and justify that position.

Eric Martlew: rose

Stephen Hammond: I am delighted to give way.

Eric Martlew: I am very pleased that the hon. Gentleman is delighted. I just asked the Minister whether he would be happy for Network Rail to bid for this particular line. I put the same question to Her Majesty's Opposition.

Stephen Hammond: Network Rail will be able to bid for it. As the Minister said, it would be wrong for anyone in the House to prejudice the outcome of the bidding process.
	The Government assume that if the assets of LCR were sold, their valuewithout this legislationmight be sub-optimal due to the lack of clarity about the funding arrangements for capital construction and the future. One of the things that we will be keen to learn from the Minister is what guarantees the Secretary of State has given with regard to the construction phase. Will the Bill allow the assets to be sold with those guarantees? Does it imply that if London and Continental Railways assets were sold, the debt would remain guaranteed by the Government and the original funders?
	The Minister was right to say that clause 1 implied the existence of a sufficient level of uncertainty over whether the powers that the Secretary of State had to fund the project during the construction phase would continue into the operational phase. We shall want the Minister to clarify at some point whether he means that those powers apply to the whole channel tunnel rail link, or just to the channel tunnel rail link and LCR after the construction phase. Does the uncertainty stem from some ambiguity in the original Act, and why did that Act not cover the post-construction phase? That is an important point because, as the Minister well knows, later this week a Bill analogous to this will be considered in Committee, and we need to be sure that the provisions in this Bill cannot be applied to the construction phase of another major project.
	I assume that the import and intent of the Bill will not affect a net change in the overall cost to the public exchequer, but merely confirm what is already the case. However, questions arise from the Secretary of State's power to continue to fund the channel tunnel rail link and the trains that run on its infrastructure. Does that imply that the subsidy applies to both infrastructure managers and train operating companies? Will the Minister confirm that there will be no overall change in public cost, but merely a restatement of the guarantee? Why is it envisaged that the Government will subsidise the operating cost, and for how long is that envisaged to last? If Eurostar train operations succeed or at least break even, why should the public purse continue to operate a public subsidy? All that arises in clause 1. Although the Bill itself is small, we shall have a fair amount of work to do in Committee.
	Clause 2 appears to repeal some of the provisions in the Channel Tunnel Rail Link Act 1996 relating to the Office of Rail Regulation which it is claimed are no longer necessary. Again, we shall seek clarification of the exact extent of what the Government are doing. Under section 16(1) of the 1996 Act, any operator of CTRL is not required to hold a licence under the Railways Act 1993, and therefore access arrangements relating to the channel tunnel rail link do not generally require the prior approval of the ORR. We shall seek elucidation of why the operator is not required to hold a licence. Will that continue into the operational phase, and, if so, does the Minister expect the position to change? Do the access arrangements that currently do not need prior approval not need it because they have been agreed, or because they will be regulated by some different method?
	I understand that all access contracts in relation to the channel tunnel rail link are outside the regulation of the ORR under the terms of the 1993 Act. How long does the Minister intend that to continue, and is it really desirable? What impact will it have on the ORR's normal powers in relation to safety and performance? All that is covered by clause 2, which is short but gives rise to a number of issues.
	Clause 3 makes some changes to the ORR's duties in relation to the channel tunnel rail link. It gives specific powers to ensure that functions in connection with the national rail network which the ORR formerly exercised to prevent the construction project from being adversely affected are now changed. It is a small repealing measure. As the Minister said earlier, clause 4 allows the ORR to charge a fee to the operators of the channel tunnel rail link in proportion to the cost that is incurred.
	Although this is a relatively small Bill, clauses 1,2 and 3 will require scrutiny in Committee. As I said earlier, however, behind the Bill stands a unique British achievement, and the Minister was right to praise it. Conservative Members also salute that unique achievement.
	I am grateful to the Minister for his offer of a briefing prior to the Committee stage. I hope it will be enlightening, and that it might raise the scales from my eyes with regard to some of the Bill's more technical points. We intend to aid the Bill's parliamentary progress and I ask my colleagues to support it.

Charles Clarke: As the hon. Member for Wimbledon (Stephen Hammond) has said, this is a short Bill which is uncontroversial in the House. It does have some significance, however, certainly for people such as my constituents in Norwich who are trying to use Stratford station in the way suggested by my hon. Friend the Member for South Thanet (Dr. Ladyman)to get better access to Eurostar and services to north Kent. I want to probe a little the remark made in response to his intervention by my hon. Friend the Minister, who said that the Bill will make no difference to the development of that.
	I strongly support the Bill, particularly the part that confirms section 6(1) of the Railways Act 2005 giving the Secretary of State the power to
	provide, or agree to provide, financial assistance to any person
	(a) for the purpose of securing the provision, improvement or development of railway services or railway assets; or
	(b) for any other purpose relating to a railway or to railway services.
	As I understand it, clause 1 of the Bill confirms for the avoidance of doubt that the Secretary of State can following completion of the construction project continue to provide financial assistance to CTRLthe channel tunnel rail linkunder the powers of the 2005 Act. That is one of the clarifications that the Bill seeks to make.
	In particular, the Bill confirms the Secretary of State's power to provide capital funds through a range of different mechanisms for the CTRL project. I understand why my hon. Friend the Minister therefore said that the Bill was not associated with a high-speed link such as High Speed 3 or HS4or, in the case of Norwich, probably HS15, when it comes around. He might be interested to know that the leader of the Liberal Democrats on Norwich city council is arguing for us to get a full high-speed linkthat HS15 projectright away, but I understand the public expenditure constraints my hon. Friend the Minister described.
	The Eddington report's statement that we should be trying to get far more efficiency out of our existing network is of relevance to the Bill and this issue, and in particular the question of the interchange between the main line service between Norwich and Londonand other services coming into Stratfordand Eurostar and the Kent system. It seems to meperhaps this will be clarified in the wind-upthat the power that the Bill confirms allowing the Secretary of State to require that money be spent on improving this network and the assets related to it could in principle, if the Secretary of State so desires, apply to creating out of Stratford station an effective high-quality interchange. I want to elaborate on that point.
	The Secretary of State should use that power to invest capital in the vital interchange station at Stratford, and in particular either to construct a travolatorit would have been far better had that been established earlieror another convenient walkway, such as the eastern egress walkway which is currently being talked about, from the main line and other services at Stratford to the new international station on the Eurostar route. As other interventions have suggested, that will also be the connection to the new service to north Kent. Therefore, this is not simply to do with a high-speed service from the constituency of my hon. Friend the Member for South Thanet or from Ashford; it is also to do with an interlink for people travelling from East Anglia to Kent. If they have that interchange at Stratford, the services will be improved.
	There is discussion and argument about what the exact distance of the interchange will be. I understood that it might be 400 m to 600 m, but I heard the Minister say he thought it might be 200 m. It will in any case be a relatively short distance, but it does not seem to me to be an unreasonable demand that people travelling internationallygoing on holiday, perhapsshould not have to lug their bags about and should instead have the kind of automatic transit that we see in every airport in the country. My hon. Friend the Minister might confirm whether I am right, but that does not seem to me to fall outside the Secretary of State's remit in terms of the capital investment they could require.
	Of course, the case for investing in the interchange station is very powerful. There are three central arguments. First, as I said a moment ago, it would increase use from East Anglia and some parts of London, including the Canary Wharf areathat is not entirely insignificant when looking at business on the Eurostar serviceof both Eurostar and the service to north and east Kent. As the hon. Member for Wimbledon said, that represents about 40 per cent. of the capacity of that line. That increased use would be a real benefit to millions of people, certainly including my constituents but also many others throughout the whole east and south of the country.
	The second case for investing in the interchange station is that it would increase revenue to Eurostar and put the Government in a stronger position to gain a proper return on their investment, which I understand is one of the Bill's purposes. For example, a survey commissioned by Newham council from Buchanans suggested that such a change would increase Eurostar's revenue by no less than 10 per cent. That is a big increase. There have been counter-suggestions that the figure could be as low as 2 per cent.; however, even 2 per cent. should not be sniffed at if one is trying to get better use of the network as a whole. That would be a matter of real interest to those involved in the restructuring of London and Continental Railways. In the context of the restructuring that the Minister described in his opening remarks, the potential travel and transit on the route is very important.

Eric Martlew: I am listening very carefully to my right hon. Friend, who is talking about changing at Stratford to get on the Eurostar. Does he share my concern that very few of the trains stopping at Stratford will be going on to the continent?

Charles Clarke: I am glad that my hon. Friend has raised that issue, because I am very concerned about it. I had a series of meetings over the summer with the people running Network Rail, Eurostar and various other services, such as National Express, which runs a service through that station. I was not going to say this but perhaps I willdespite the assurances that I received from Eurostar, I want it to be spelled out in terms that the service will stop at Stratford with the frequency required.
	I note some of the things that have happened to the Ashford servicethe hon. Member for Ashford (Damian Green) is in his placeand I am slightly concerned that the Eurostar management would really like people to travel from St. Pancras to Ebbsfleet and on through the tunnel, without bothering about Stratford and Ashford. I might be wrong in saying that and I am not making that charge directly, but it is a concern. That is precisely the reason why I draw attention to the Secretary of State's powers in these matters, which is what this Bill is about. The Secretary of State can use such powers, and I shall deal in a moment with the effort by the former Deputy Prime Minister to use such powers precisely because some of the companies concerned were not prepared to go along with what the Government were seeking to achieve.

Stephen Ladyman: I agree with everything that my right hon. Friend is saying about the importance of the interchange between the regional and the international station. However, I should point out in the light of what has happened to Ashford that Eurostar management never gave any hint that they were intending to cease the stopping of the Brussels train at Ashford while the station was being built, and while their support for Ashford was necessary to build Ashford International. I, like him, have my doubts about whether they will be committed in the long term to the Eurostar's stopping at Stratford, for the same reason.

Charles Clarke: I am grateful for that intervention and I think that my hon. Friend will agree that the strongest way to convince the management of Eurostaror, indeed, of any train serviceof the utility of stopping at a particular station is the impact on passenger numbers and, therefore, on revenue. That is why I cited just before he intervened studies suggesting that revenue would increase if the kind of investment in Stratford station were made that would make a difference to the motivation of the management. I do not blame Eurostar management for wanting to run a service in a wayin the right waythat makes them money, but I question whether they are making the right judgments from the point of view of revenue development.
	I was arguing, first, that investment in the station would increase the use of services, and secondly, that that would therefore increase revenue to Eurostar, which is in the interests of Eurostar and of the Government of the day when looking at the restructuring described in the Bill. Thirdly, that change would increase incentives to travel by rail, rather than by car. For example, it would reduce the amount of car journeys from East Anglia to Ebbsfleet to pick up the Eurostar. Some in the train business believe that it is okay if people drive to Ebbsfleet, but it is getting on for a 100-mile drive from parts of my constituency to there. It would be far better if people got on the train and made the change at Stratford if they were going to do that.
	The regulatory impact assessment suggests that
	the provisions within the Bill do not have a direct impact on emissions.
	That refers to carbon emissions. I am certain that the indirect benefits for the environment are significant.
	I am arguing about utilisation and the benefit to constituents; about revenue to Eurostar and, therefore, ultimately to Government in the restructuring that is talked about; and about sustainability and environmental improvement. For all those reasons, I maintain that capital investment at Stratford is important. I am delighted that my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) is in her place, because she chairs the Select Committee on Transport.  [Interruption.] She moves so elegantly that it is a miracle to behold. I hope that I shall not misrepresent the Committee's central conclusions. I read them to say that the Committee had come to the view that the interchange at Stratford would enhance the rail network as a whole and would take the situation forward positively.

Martin Linton: Does my right hon. Friend accept that it is difficult to reach St. Pancras station from some parts of London? The development of an orbital service in London whereby it is possible to go around the centre of London rather than through it, and increasing congestion in the centre, may mean that his campaign for all trains to stop at Stratford and for better facilities there will get support from many people in London for whom the move from Waterloo to St. Pancras, although welcome in some ways, creates a longer journey to get on the Eurostar in the first place.

Charles Clarke: I strongly agree. I think that I am right in saying that Stratford is the sixth largest interchange station in London, for exactly the reason that my hon. Friend suggests. I cited Canary Wharf, although I know that it is not in his constituency. Let us consider air travel, for example, the routes from London City airport to Brussels, Paris or elsewhere. The chances of getting people working in such places on business to go quickly by changing at Stratford are much better than hoping that they will go back to St. Pancras, drive to Ebbsfleet or use some other route to get on the train. I hope that they will be able to make such a journey in a much more effective way.
	The Bill is important because Government intervention is necessary to achieve these benefits. Reference has been made to the fact that in 2001 the then Deputy Prime Minister, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), set down clear conditions for a high-quality interchange at Stratford, placing a planning obligation upon Union Railways, the company constructing the channel tunnel rail link. There is little doubt that Union Railways openly flouted the requirement, despite an explicit Government instruction. Union Railways claimed that it could not afford either the capital or the ongoing maintenance costs for this improvement, and eventually the Government's stipulation was, sadly, simply ignored. Representations were made by many people: those who were dealing with the London gateway; people from Newham council and a range of different other areas; and some rail companies that wanted the improvement to happen. I understand that when detailed legal advice was taken, those who supported carrying through the Government's commitment did not think that they would legally win the case to do that, so it got slid away.
	It is important that we use the power in section 6(1) of the Railways Act 2005, which, as I understand it, this Bill confirms will apply directly to this railway system, to require the investment that is needed. The attitude exhibited by Union Railways was unacceptable, which is why the Bill's requirements are necessary. The Secretary of State should use her powers in the ways that I have described.
	The power can, and should, also be used to encourage good connections to the Eurostar from throughout the country. The Under-Secretary of State for Transport, my hon. Friend the Member for Glasgow, South (Mr. Harris), makes a powerful case in resisting HS2, HS3, HS4, HS5 and so on simply because of the amount of money involved. That is a serious factor. However, would it not be possible and better to invest relatively much smaller sums to use connections such as Stratford in a way that genuinely creates an integrated system?
	The regulatory impact assessment explains that the Bill
	sets out provisions which will facilitate the restructuring of LCR by clarifying the legislative and regulatory position of the HS1 railway, and goes on to say that without government intervention there is a risk of legal or regulatory uncertainty affecting the restructuring, which could jeopardise Government's ability to optimise value for the taxpayer.
	That is a serious warning in the RIA, when we consider the situation in the round, and that is why the Bill is necessary. However, that is also why I urge the Secretary of State to ensure that the clarification includes the commitment to capital investment in a high-quality interchange at Stratford station.
	The RIA makes it clear that the Government will receive capital receipts if assets are sold. I believe that a good use of such receipts would be to invest in the capital work at Stratford station that I have suggested. Such an investment would be worth while for the country, so I hope that Parliament will pass the Bill and that the Secretary of State will act on it.
	I would welcome the Minister's reflections on his response to an earlier intervention that the Bill would make no difference to Stratford station. I am aware that he was responding on the hoof, but I hope that he was wrong. I hope that the powers established by the Bill will give the Secretary of State the power to encourage the development of a high-quality interchange at Stratford, which would be important for my constituents and more widely, for the reasons that I have set out today.

Susan Kramer: This is a short but highly technical Bill. I agree with the Conservative spokesman in appreciating the fact that we will get a briefing on the Bill next week, and I am also conscious that there will be work to be done in Committee. Although the Bill's clauses seem narrow, the consequences have significant monetary value, whether for the taxpayer or the fare payer ultimately using the range of services. Like others, I was caught up in the excitement of the completion of the channel tunnel rail link and the glittering opening of St. Pancras station. It was a glorious evening, and there was a certain satisfaction in seeing a project such as High Speed 1 come to a successful conclusion and feeling that we, too, had a high-speed service, not just the continental Europeans.
	I shall not go into detail on the history, because others have, but it has some warnings embedded in it. It would be best to keep some of those warnings in mind as the Bill makes progress.
	I suggest to the Minister and the Conservative spokesman that it is wise to be cautious about using the phrase on time and on budget. When the right hon. Member for North-West Hampshire (Sir George Young), then Secretary of State for Transport, announced the award of the contract to London and Continental Railways in 1996, the total Government contribution was set at 1.7 billionwith no guarantees or loansand the completion date was 2003. It was only with the rescue packageI commend the Government on their willingness to push that forward in 1998that we actually got the project that people now describe as on time and on budget. Most people agree that there may have been some flaws in the procurement that made it a much easier target to achieve.
	The Government now stand credit behind 3.7 billion in bonds issued by London and Continental Railways. There is still a potential for the Government to loan directly up to 400 million, and up-to-date figures on the likely figures would be welcome, although that seems to be a constantly moving target. The Government, for their pains, have in effect obtained the equivalent of an equity stake of approximately 35 per cent. in the company and, in 2006, LCR was reclassified as a public sector company.
	The flaws in procurement raise several issues. It is clearly evident that the private sector managed to out-negotiate the Government into entering a contract in which the risks remained overwhelmingly with the public sector, with precious little remaining with the private sector. The GovernmentI suspect that the problem lies largely with the Treasurywere far too naive in their analysis of passenger numbers. The original forecast that Eurostar would have 21 million passengers by 2004 was ludicrous. Even the revised and re-revised downside cases of 8 million passengers by 2006 have been missed. Passenger numbers are starting to move up a bit now, but I would be interested to hear from the Minister about the greater risk profile for passenger numbers now that the base has been moved to St. Pancras.
	As many in the industry recognise, the business commuters based in south London are an important element of Eurostar's passenger numbers. They have taken advantage of the Heathrow, Gatwick and Waterloo triangle, but they will now be lost. I shall be interested to know the potential impact of that loss on the project, and to what extent the money that the Government have put in may be put at risk.

Eric Martlew: Does the hon. Lady accept that people going to Heathrow have to use Paddington anyhow, and that the ones going to the continent may as well use St. Pancras? I am afraid that I do not agree at all with this part of her argument.

Susan Kramer: One has to look at how people function in real life. The reality is that significant numbers of business customers in south-west London have been happy to make the easy journey by train to Waterloo, but that they simply jump in a cab to go to Gatwick or Heathrow. It is unfortunate, but their passenger business will largely be lost, as the journey to St. Pancras will be more than an hour longer than the current journey to Waterloo. In addition, it will be far more complex, with passengers having to change trains and manage their bags and so on. All those are significant matters and, if we are to understand the value of the Government's investment in the project, they cannot be ignored.

Gwyneth Dunwoody: I had not intended to intervene, but the hon. Lady seems to be suggesting that all our business men and women live in south London, something that may come as a bit of a surprise to my hon. Friend the Member for Vauxhall (Kate Hoey) and one or two others. Moreover, she seems to ignore the fact that many people in the triangle that has been mentioned, as well as in the midlands and the north, will benefit from the transfer of the Eurostar service to what is a fantastic and sparkling new station. We should try not to be too parochial when we talk about the rail serviceexcept, of course, when we do so in relation to Crewe and Nantwich.

Susan Kramer: Obviously, I respect the hon. Lady's expertise and knowledge when it comes to transport, but the triangle offers three options for travel to continental Europe. The existence of that cluster of departure points has attracted a significant number of people to live in the area: they make the journey on a regular basis and are an important element of Eurostar's passenger base. It is not that business people do not live all over London, and in the north and the midlands, but they are less likely to make regular rather than occasional journeys. That changes the profile of Eurostar use, as the company has recognised.

Kelvin Hopkins: Does the hon. Lady accept that, in the fullness of time, there will be an upgrade of the Thameslink services between south London and the new St. Pancras International station? There will be an escalator straight up to the Eurostar platforms, so will that not make a difference?

Susan Kramer: I confess that I have sometimes used the phrase Thameslink 3000, but I accept that any additional access to St. Pancras will mitigate the problem that I have identified. The project has constantly failed to meet its forecast targets, especially in respect of passengers, and the cash flows involvedin the early stages in particularare significant. The problem that I have described is not major, but it should be noted and not ignored.

Tom Harris: I am grateful to the hon. Lady for giving way, but I hope that she will clarify her position. Is she suggesting that it was wrong to choose St. Pancras over Waterloo International as the Eurostar terminal? Does she believe that Eurostar services should have continued to go from Waterloo instead of St. Pancras?

Susan Kramer: The original planin many ways framed as a promisewas that services would continue to leave from Waterloo as well as from St. Pancras. I had hoped that we could keep to that commitment, even though I accept that it would have been difficult to achieve in financial terms.

Tom Harris: I am grateful to the hon. Lady for giving way to me a second time, and I shall try to make this the final intervention that I make on her. She has said that the option of using both stations was too challenging in financial terms, so which would she prefer as the single terminalWaterloo or St. Pancras?

Susan Kramer: I would have preferred not to spend the additional money on moving to St. Pancras, but I was relying on the idea that we could manage to use both stations. Finding a mechanism to do that would have been to the greatest advantage of both.

Stephen Hammond: My constituents are undoubtedly affected by the move of operations from Waterloo to St. Pancras, but none the less St. Pancras is a magnificent achievement. Does the hon. Lady agree that people from south-west London are more concerned about the fact that platforms at Waterloo that could have been used to ease overcrowding will not be used?

Susan Kramer: I very much agree with that point and will address it later in my comments, which are not long so the hon. Gentleman will not have long to wait.
	I appreciated an earlier intervention about the disappointing amount of rail freight using the channel tunnel, so I am interested in the Bill's implications for freight. There is a general perception that, rightly or wrongly, one of the difficulties in increasing the amount of rail freight using the tunnel has been the conflicting interests within the SNCF, as both owner and provider of rail services. As the Minister is aware, other freight operators, such as EWS, are extremely frustrated at their inability to get access to the channel tunnel for the services they want to run.
	Given the restructuring of the projectthe separation into different packages of the track, operations and propertyit would be exceedingly interesting to know how possible conflicts of interest will be addressed, as it is perfectly possible that somebody could be an investor in more than one of the pieces. The ongoing frustration that we hoped was coming to an end could thus continue, so I shall be interested in the Minister's comments on the issue.
	I am sure the Minister agrees that freight is an important concern for all of us, especially with climate change in mind, and that the need to shift freight from road to rail is extremely pressing and would have general benefit.

Kelvin Hopkins: I strongly agree with the hon. Lady about freight. Does she accept that the channel tunnel is one of the costs that must be borne by Eurostar services, and that the tunnel will be uneconomic unless and until we put much more traffic through it? As there are not enough passengers, that traffic will have to be freight, so does she agree that we need a delivery system for freight on our side of the channel to make full use of the tunnel to make it an economic proposition, which will benefit Eurostar indirectly, too?

Susan Kramer: I very much agree. There is huge demand for continental freight transport and I am concerned about the quantities of freight that are likely to arrive in the UKthe industry suggests another 2 million trucks-worth within 10 years. The only way it can be moved successfully through the country is to have more freight capacity on our rail lines overall. I am a fan of dedicated freight lines, which are not a subject of the Bill, but the idea feeds into its general structure, as the framework could be affected by the terms of the Bill.
	The quality of procurement for the project is relevant, because the Bill would shape the sale of the underlying assetpossibly the next step. As the Minister is aware, in 2005 the National Audit Office took the view that the taxpayer was still likely to be called on to fund a shortfall in LCR's cash flow, and that the economic justification for the links remained marginal. Those issues will have to be addressed in the next step.
	In 2006, the Public Accounts Committee came to similar conclusions and recommended that the Department for Transport should actively manage the size and timing of LCR's call on the access charge loan, to give LCR and Eurostar an incentive to maximise revenues.
	It would be interesting to understand how the Bill, and the sale that will follow on, will impact on those issues.
	The Minister has confirmed that, in effect, the Bill is a preparation for sale. Rob Holden, the chief executive officer of LCR, said:
	After November 14, the restructuring
	I think we can safely read the word sale
	will be our No 1 priority.
	I fully support what was said in the Treasury minutes, in 2006, in response to the National Audit Office. It was noted that
	the best way of protecting the taxpayer's interests would be for there to be an open, competitive and transparent process before the sale of LCR.
	The Minister has been kind enough to let us know that the likely structure will involve a division between track and train operations, and property. He has confirmed that it will be possible for Network Rail to be one of the bidders. I wonder whether he is able to go into some of the ways in which the Bill could help to make sure that the project remains an integrated part of our overall networkrather than standing alonegiven that the rest of the track in the country is owned directly by Network Rail. There is also the issue that I raised before: ensuring that we do not, through the creation of complicated consortiums that own different pieces, find ourselves once again facing an anti-competitive conflict of interestwhich seems to have expressed itself in resistance to allowing other freight operators to use the tunnel.
	I am rather unclear about the impact of the sale. Will the Government receive an equity return that involves getting their 35 per cent. stake back? What will happen to the debt? Will that be repaid through the financing? Given that the construction risk was one of the primary arguments for the Government's agreeing to stand behind 3.7 billion of debt, and that construction risk is now over, will we have some assurance that guarantees on that figure will be removed?
	Can the Government try to give us some confidence that the public will genuinely get value for their support for, and investment in, this project? I just give some warning in relation to the recent example of Northern Rock. That reminds us that the private sector tends to think that it can play fairly fast and loose with public money and with the Government in these kinds of circumstances. The Minister will be conscious of the pain and anguish that has followed the collapse of Metronet's public-private partnership. That demonstrated that such negotiations will be exceedingly complex, if they are to be successful.
	I want to ask the Minister about the use of the proceeds from the sale that the Bill structures. Others, including the Conservative Front-Bench spokesman, have mentioned that the Environment, Transport and Regional Affairs Committee reminded the Government in 1999 that, when the Channel Tunnel Act first got parliamentary approval in 1987, the regions were promised a benefit. It was to be for them as much as for the people in London. The ETRA Committee report that looked at the final project said:
	The regions have been cheated.
	The Government could begin to fulfil that promise to the regions by directing all or part of the proceeds from the sale into expanding the high-speed rail network. That would not pay for the network from beginning to end, but it could begin to provide part of the Government proportion and begin to pay for the planning and feasibility studies. We could begin to look at the kind of structures that have been used for the Crossrail project, for examplethe kind of structures that could bring development and business money in, to enable a high-speed network to be developed. My party is going to look at a lot of that over the next year.
	I join others in saying that high-speed rail has huge potential in this country. The Government are short-sighted in putting off even looking at High Speed 2 until 2012. Although they may argue that with three or four hours to spare a person can make a rail journey between significant parts of the UK, the benefits that come from high-speed railwe shall see them in Kentare jobs and regeneration. Given the intense population pressures in the south-east, the use of a rail network that combined high-speed rail with dedicated freight lines, to take business, jobs and opportunities across the country, rather than keeping them essentially south-east and London-centric, would be of benefit to absolutely everybody. We have a pot of moneynot the largest in the world, but a significant onethat the Government must, to some extent, regard as a windfall; it could be put towards trying to make that happen. That would live up to the early promise associated with the channel tunnel and the beginning of the idea of an exciting, new and different future for rail in this country.

Stephen Ladyman: I have listened carefully to what the hon. Lady says, and I do not at all rule out the possibility that there will need to be further high-speed projects in future. I do not think that there is one fag paper's difference between the positions of the Liberal Democrats, the Conservatives and the Government, all of whom basically offer a feasibility study on further high-speed lines. However, those feasibility studies have to take account of not only the cost of constructing high-speed lines, but the opportunity cost. It may be that what would give us the best bang for our buckthe best reward for the regionswould be to spend the money on accessing existing mainline stations in the regions, or on improving stations such as New Street. That might actually give faster journey times to London, as opposed to the rather marginal benefits that a new high-speed line might offer.

Susan Kramer: I thank the hon. Gentleman but I think that there is huge opportunity with High Speed, and that ignoring it may be to our detriment. A point that he missed is that when a new line is created and opens up genuine opportunityCrossrail is an examplethere is an ability to capture the development money. He will be aware of the Jubilee line figures: there was a cost of 3.2 billion, even with overruns, but an estimated benefit to developers of 13 billion. The money to get the line built, and the profits, were only just captured. In recent years, we in this country have taken a rather poor approach to the way in which money can be pooled together, because of the benefits, to create infrastructure. A change in the thinking is required. I hope that the Government will use the significant amount of money that will hopefully come from the line to open up that world of possibilities.
	The Minister must have expected me to mention my next subject, and the Conservative spokesman gave me a wonderful prompt. I believe that there are obligations to those who lost out with the new link. My constituents in south-west London, who valued the Eurostar at Waterloo, are obviously in that group. My hon. Friend the Member for Kingston and Surbiton (Mr. Davey) and I have been assured by the Minister in previous exchanges that two of the Eurostar platforms at Waterloo will be transferred to South West Trains in 2008 to improve our commuter services, and that in the 2009 to 2014 cycle, the remaining Eurostar platforms will be converted to domestic use to allow 10-car trains on all lines into Waterloo. I raise the issue because recent press reports questioned that timetable and that plan. This is an opportunity for the Minister to give us reassurance on that point.
	Like the Conservative spokesman, we fully support the Bill and the intentions behind it. We shall be interested to follow the details in Committee; that is for the benefit of all, because as we know, a small, technical drafting error in such a Bill can have significant financial consequences. We are delighted to support the Bill today.

Eric Martlew: I am pleased to have been called to speak, because it means that the high-speed link has been completed; that is why we are debating the Bill. It is strange that when there is a problem the Chamber is full, but when there is a success, such as the one that we are considering now, there are very few people presentbut that is the way of the world.
	I visited the line a number of times during its construction. The last occasion was on 14 November to see the start of the regular services between St. Pancras and the continent. It gave meand, I am sure, many other peoplegreat pride to see the reinstatement of St. Pancras. It is probably now the finest station in Europe. New technology was used on the line leading into the Victorian station; it was a great combination. Contrast that with the sense of shame that many of us used to feel when we travelled from Waterloo on that Victorian railway, which slowly chugged its way along to the channel tunnel. It went through the tunnel and came up on the French side as a high-speed railway. No doubt there was a feeling of shame, but now we do not have to feel that. We leave from a station that is probably the finest in Europe and arrive at a shoddy station in Paris. Perhaps we should not take comfort from that, but we will.
	The opening of the rail link has been a great occasion and we should take pride in it. We should give thanks to the project team which lately, since 1998, has delivered it on time and on budget. It is a matter of great regret that the project team, which is the equal of the best Victorian engineers that we ever had, is being broken up because we do not have a plan to take the high-speed link further.
	I pay tribute to my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the former Deputy Prime Minister, who had the vision and the courage. It was 10 o'clock on a night in January 1998 when he came to the House and made a statement that the deal had been done and that a public-private partnership had been created. It was interesting to hear the spokesman for the Liberal Democrats asking where the money would be spent now. We should not forget the contribution that my right hon. Friend made, and I was pleased to see him at St. Pancras on 14 November.
	I have been questioning the Minister about the Bill and whether Railtrack will be able to bid. I am delighted about that, because we do not want a fragmented rail system again.

Stephen Ladyman: My hon. Friend said Railtrack, instead of Network Rail.

Eric Martlew: I am sorry. Railtrack caused us nightmares. Network Rail needed to be created and we now have a system that is working well. The Minister pleased me when he said that it would be allowed to bid. I shall be interested in the financial arrangements that will allow it to do so. That is good news.
	Now that we have High Speed 1, we must develop High Speed 2somebody mentioned High Speed 3, but we do not yet have High Speed 2and bring the line from St. Pancras to the north. One or two hon. Members have mentioned that there is some resentment in the rest of the country about the amount of money that has been spent on infrastructure in the London area. The public transport system in London is very good. In my constituency the only alternative to a bus is to walk. I chaired a meeting yesterday on Thameslink, which seems a good idea that will bring benefits not just to London but to the south-east, and Crossrail is to go ahead as well.
	There is a feeling that the north is being left out. I can become obsessive, as I did in about 1992 about the upgrading of the west coast main line. I am still obsessive, as the Minister will know from our meeting last week. Through the work of colleagues, many others and myself, we now have a railway line on the west coast that we can be proud of. The Government provided 89 billion to upgrade it to my constituency and to yours, Madam Deputy Speaker, but we still need a link from St. Pancras up to the north that will take my constituents and others to the continent, or perhaps to Heathrow. One of the proposals, from Greengauge 21, sets that out.
	Some comment has been made about the Eddington report. I was part of the Select Committee that questioned Sir Rod Eddington and I pressed him on the need for a high-speed link. Despite the reports in the press that the idea had been discarded, he said that there was a role for a high-speed link and that the planning for it should start now.
	High Speed 1 is tremendous. The Government and the country can be proud of it. The improvement in St. Pancras is welcome, but we must go beyond that and take those advantages to the north.
	I shall comment briefly on Stratford. I went there to see the opening of the station. It is a totally different sort of stationit is modern, and it is a credit to those who designed it and to the Government, who funded it. However, as we know from the Olympics plans, it is only seven minutes from St. Pancras, and Eurostar will not want to stop at Stratford. It might make one stop as it comes into Kent and continue to St. Pancras. I am not sure whether the Bill can do anything about that. Will the Minister clarify that? It is a technical Bill and needs to be examined carefully, as the financial implications of getting it wrong could be costly.
	I return to where I startedthe Bill is before us as a result of a successful project which is a credit to the country. I am sure the technical aspects of the Bill will be sorted out and the maximum benefit given back to the taxpayer who, through the Deputy Prime Minister at the time, had to bear the risk at the early stage. I welcome the Bill and I hope that my hon. Friend the Minister has been listening to the calls from all parts of the House for the high-speed link to continue to the north.

Damian Green: As the Minister acutely predicted, I shall make some remarks about the intermediate stations in Kent, but before I do so, I shall pick up two points. The first was made by the right hon. Member for Norwich, South (Mr. Clarke) and shared by the hon. Member for South Thanet (Dr. Ladyman). The right hon. Gentleman was worried that the guarantees given to Stratford might not be watertight. From my experience in Ashford, I can say that if those guarantees are not nailed down, he is right to be sceptical about what might happen in the future. I share those worries.
	Secondly, I am fascinated to hear from all parts of the House the unalloyed enthusiasm for new high-speed tracks. I share that enthusiasm for the vision of a high-speed railway running up the spine of the country, no doubt eventually as far as the Minister's constituency in Glasgow, but as the only Member present who has had a high-speed line built through his constituency, I warn hon. Members that it is not an unalloyed joy. I apologisewe are joined by the hon. Member for Dartford (Dr. Stoate), who also has a high-speed line through his constituency.
	I make two points. First, if Members want their constituents to welcome a high-speed line with open arms, they must make sure that their constituents get some direct benefit from it, or they will only see the downside. If we build lines from London to Birmingham and then to Manchester, most of the places in the intermediate areas will not benefit very much. People should recognise that. It may well be worth doing as a national project, but we should not kid ourselves that many people will benefit directly.
	The second point is the lesson learned from Ashford: people will want to consult. What happened there was that four different lines were drawn on maps and lay there, as it were, for yearsthus blighting many properties, completely unnecessarily, for years. That planning blight caused more angst and difficulty than the actual construction. Although the period of construction was, of course, difficult, people at least recognised that something was happening. When we come, as I hope we will, to build High Speed 2, 3, 4there have been bids as high as High Speed 15, as far as Norwichplease can whoever is in charge of the rail network learn the lessons from the building of the relatively short stretch of high-speed line across Kent?
	I want to raise a few points about the Bill that particularly affect the intermediate stations in Kent, particularly Ashford station in my constituency. The bulk of the Bill confirms that the Secretary of State will continue to be empowered to fund the CTRLor High Speed 1, as we now call it. I wish to explore the Secretary of State's role as part of my initial point. The Minister will be well aware of the background. Amid all the celebrations, in which I shared, about St. Pancras and the new services, this week also saw the endtemporary, I hopeof the Brussels services from Ashford. For my constituents and many others around Kent and Sussex, that is a blot on what should be an unalloyed celebration of the expansion of the rail network. The lesson that I draw is that we need better and more positive ministerial involvement to preserve the wider public benefits of high-speed rail. The need for that involvement is shown by a letter that I received in August this year from Guillaume Pepy, the chairman of Eurostar. He said, quite bluntly:
	Whilst Eurostar acknowledges the growth plans for both Ashford and Ebbsfleet, the Board is equally clear that the business has a purely commercial remit to maximise its passenger revenues for its French, British and Belgian shareholders, and to help pay for the construction of High Speed 1, and is not accountable for regeneration.
	That is honest and direct; the company is in it just for the moneyfair enough. The letter makes it clear that the wider responsibilities for regeneration, always regarded as a hugely important part of the High Speed 1 project, lie with Ministers. The problem has been that Ministers have now declined that responsibility. Another letter, written in July by Judith Shepherd of rail customer and stakeholder relations at the Department for Transport, to Edith Robson, a constituent of mine, says:
	It is important to state that the Government has no formal powers over Eurostar's operating decisions and that Eurostar, whilst under an obligation to operate a sound commercial business, is at liberty to set its own timetables.
	That is a classic black hole, between the responsibilities of the public and private sectors. Eurostar says that it does not care about regeneration and the Government say that they have nothing to do with Eurostar's timetable. Even though tens of millions of pounds of taxpayers' money is spent on regeneration efforts, based on the international train services and the timetable, no one, apparently, is responsible for making sure that the rail services contribute to the regeneration effort. The buck stops nowhere.

Kelvin Hopkins: I have been listening with great interest to the hon. Gentleman, who seems to be making a powerful case for the public ownership of Eurostara change that I would strongly support. That would make sure that the services benefited the British people.

Damian Green: I do not think that Eurostar would benefit from public ownership. However, I hope that I am making a powerful case in favour of Ministers exercising the responsibilities contained in the legislation, including in the Bill. If Ministers did so, we could indeed gain the benefits of the huge amounts of private investment attracted into the project and the rest of the rail network since privatisation. That investment has, of course, funded the huge growth of the rail network in the past decade or so; that point is not controversial on either side of the House.

Stephen Ladyman: Let me say straight away that I entirely agree with the hon. Gentleman about Eurostar's ridiculous decision about Brussels services from Ashford, and I fully support his campaign to reverse that. However, I cannot let him pin the blame on Ministers, who do not have responsibility for Eurostar. The hon. Gentleman seems to be arguing that when the Government let a franchise, they should decide on the frequency of the passenger service and where it should stop. The Government have that exact system of franchising in place for the whole of the rest of the network in this country. However, the Conservative party is now opposed to it and says that it would wind it up.

Damian Green: I do not agree with that analysis. The specific point is that the whole High Speed 1 project and channel tunnel rail link have been based on the idea that they would contribute to wider regeneration efforts in my and the hon. Gentleman's constituencies and other parts of Kent. I refer the Minister and the hon. Gentleman to the Public Accounts Committee's 38th report, of May 2006. It states:
	The economic case for the Link remains marginal. On passenger traffic alone the Link is not justified, so regeneration benefits are required to make the project value for money.
	That is why it would have been correct for Ministers to play a more proactive role in trying to secure the full regeneration benefits.
	I am conscious of and grateful for the Minister's attempt to question Eurostar's decision. However, he and I know that that was very late in the day. Frankly, the Department for Transport did not play a proactive role throughout the procedure, despite the huge coalition that had assembled. The people arguing were not limited to those from Ashford or even Kentthe coalition was cross-party and from across the south-east of England. It spread as far as the South East England Development Agency, and even the European Commission became involved. That extraordinary coalition assembled to say that the decision was bad. Frankly, the only piece of the jigsaw that was lacking was the Department for Transport, and that was hugely regrettable.

Gwyneth Dunwoody: Oddly enough, I do not disagree with the hon. Gentleman on his point that good transport schemes should carry with them a strong element of regeneration. However, we do ourselves a disservice if we ignore the fact that the original Conservative desire to have no public money in the scheme got us into an absurd situation. Although it was perfectly clear that the economic advantages were fairly marginal, when the line was about to go bankrupt it was forced to come to the Department. To say now to the Department, You are not doing the things that you were not expected to do in the first place, and you have managed to recoup only with considerable difficulty, seems mildly unfairand I am never unfair to the Department for Transport.

Damian Green: It goes without saying that the Chairman of the Transport Committee is never unfair to the Department. The hon. Lady makes the point that the Department was heavily involved from 1998 onwards; it therefore had a perfect legitimacy and locus from which to intervene if it had wanted to. However, it did not do so, and that is hugely regrettable.

Stephen Ladyman: rose

Damian Green: I shall give way one more time; then I shall have to make progress.

Stephen Ladyman: The hon. Gentleman misses the point that Eurostar is not the same as the CTRL line. Eurostar was granted its franchise before the Labour Government came to power, on the basis that it was going to be run entirely privately, with no public subsidy. At that point, it was given complete commercial freedom. When the Labour Government came in and had to redesign the financial package to complete the line, they did insist on a regeneration benefit. They insisted that the domestic service, which was to serve my constituency and the hon. Gentleman's, be carried on the line.

Damian Green: The hon. Gentleman is trying to have it both ways. He wants to praise his Government for mounting the rescue, but when things happen that he and I disagree with, he says that the Government have nothing to do with them. He cannot have it both ways. I hope that the Bill will make it more difficult to walk away from these responsibilities in future and that the House can receive some reassurance about that in the winding-up speeches.
	Looking ahead, as the Minister explained, the purpose of the Bill is to prepare LCR for break-up and subsequent sale, so that Eurostar will then become a purely stand-alone operation. It is reasonably likely that one of the bidders, possibly the successful one, will be SNCF. The chances of SNCF caring very much about Ashford, Ebbsfleet or Stratford are remote unless some safeguards are written into the sale to try to recapture the full regeneration benefits that Members on both sides of the House want and that should come from a project that has absorbed billions of pounds of taxpayers' money. I hope that the Minister can reassure me about that at the end of the debate and at subsequent stages.
	I want finally to deal with the change in the role of the Office of Rail Regulation to allow it to charge fees on the line. Will the Minister clarify whether that new charging regime is designed to allow, or even to promote, competition on using the line? He will be aware, as will others, that there have been reports of new operators who wish to run trains through the tunnel on High Speed 1, and many of us think that such competition, if technically feasible, would be welcome.
	As we have heard during the course of the debate, the issues surrounding the high-speed line are rather less smooth than the ride that we will all enjoy on it. It may yet prove in the long term to be a successful grand projet of the type that this country is traditionally not very good at. I hope so. To be fully successful, however, it needs to provide the benefits originally promised to Ashford and other parts of Kent. I hope that the Minister can reassure all hon. Members that those benefits will materialise in future.

Peter Soulsby: As a frequent user of St. Pancras, I have watched with some frustration the work that has been going on there in recent years. Along with countless thousands, if not hundreds of thousands of others, I have picked my way through the building work on a daily basis. Indeed, visitors to St. Pancras have at times been on something of a voyage of exploration, with the pedestrian routes changing almost daily and presenting a challenge to users. Looking at it now, though, I can say that all the inconvenience has been worth it many times over. The transformation of a rather run-down station and the somewhat derelict area around it has been quite stunning. I pay tribute not only to this Government and the previous Government for having the vision to see that it was possible, but to all those involved in the design of the project and the very high-quality work done on the site. It is a source of great pride, I hope to them, but certainly to us as a nation, to see that transformation and what is now undoubtedly a magnificent gateway to the UKone that we can all share in being very satisfied to see and to use.
	I speak about the transformation with mixed feelings because my flat here in London overlooks Waterloo station, and I, like many others, will miss watching the Eurostar trains snake their way slowly out of it. However, that underlines the significant improvement that has been made, because that slowness is such a sharp contrast with the speed with which they are able to accelerate out of St. Pancras. It is a revelation to those of us who watched them every day at Waterloo to see just how fast they can accelerate and how they are now able to run at something approaching their full potential.
	I want to make three brief points and in doing so to emphasise some that have already been made. First, the platforms that will be released at Waterloo as a result of Eurostar's transfer have enormous potential to relieve the congestion at Waterloo. I encourage the Government to bring forward the use of those platforms to relieve that congestion, and particularly to consider the comparatively minor investment required to bring about the crossover that is needed at Clapham Junction to enable that potential to be used to the full.
	Secondly, I want to reinforce a point that I made earlier about the potential for freight transport. Sometimes only one train a day passes through the channel tunnel carrying freight. That represents a small fraction of its overall potential not only to take existing trucks off the roads but to obviate the need in future for mega-trucks to use our roads, which are inadequately equipped for them. That potential needs to be developed, and I hope that the Government will continue to press that on the tunnel operators and the railway freight operators. In the past, the situation has been related to tariffs and influenced by the problems experienced through the use of freight trains to gain illegal entry into the UK. However, I hope that both those problems can be overcome and that the full potential of using the tunnel for freight can be encouraged.

Kelvin Hopkins: My hon. Friend may be interested to know that it is now possible to run at least 150 trains a day through the tunnel in each direction, and with signalling modifications many more than that. That equates to thousands of freight trains per year. There is no possibility of passenger traffic, but that level of freight traffic could transform the economics of the channel tunnel and, indeed, of Britain's freight transport system.

Peter Soulsby: I thank my hon. Friend for his well-informed intervention. I know that he takes a particular interest in matters of rail freight, and he emphasises my point about the fraction of the potential that is used at the moment and the enormous potential that is there for the future.
	Finally, the completion of High Speed 1 and the excitement around it emphasises the potential associated with high-speed train travel in general. I impress on the Minister that this is the perfect time to dust off plans for other high-speed links. I recognise that, as he said earlier, they are not in themselves a panaceaall sorts of issues are associated with their construction, as the hon. Member for Ashford (Damian Green) reminded us. None the less, they could increase rail capacity in the UK dramatically. Having spent a considerable amount of time on Sunday standing in standard class while coming down the east coast main line, I would say that any increase in capacity would be very welcome.
	High-speed links can increase capacity far beyond the improvements that are possible on the existing network. Beyond that, there would be a step change in terms of opening up new possibilities, particularly in attracting people away from domestic air travel. The long distance rail potential of Scotland and the north-west can be realised only on new high-speed lines. If those services are to offer a realistic option to people who use airlines, they must be fast, modern, attractive and reliable. I hope that the excitement that has been generated by High Speed 1 will prompt the Minister to dust off and revisit these plans, sooner than 2012, in recognition of the fact that this is the ideal time to excite investors about high-speed rail lines. This is an opportunity too good to be missed.

Adam Holloway: First, I would like to say how delighted I and many of my constituents are about the high-speed domestic service. I suppose for that I am grateful to the right hon. Member for Kingston upon Hull, East (Mr. Prescott).
	I would like to speak primarily about constituency matters. Although the project's financing has been thoroughly discussed, local passenger numbers are vital within this complex financial package. I would like to make some comments on that, and about the commuters who use the service and who will be affected. I would also like to touch on the integration of the rail link to the ongoing construction work. The infrastructure and regeneration efforts in general have been used as an argument for continued public funding and the backing of the link.
	I recently travelled by Eurostar on the amazing, brilliant, new, fast service. International train services began running from Ebbsfleet railway station yesterday, on time, and I and my friend, the hon. Member for Dartford (Dr. Stoate), were delighted about that. Moreover, we no longer have to listen to a French conductor, triumphant to the point of smugness, announcing that at last the train is able to achieve maximum speed every time we emerge from the tunnel on the French side. That is a relief in itself.
	The train services may now be operating, but the construction of the associated infrastructure is still ongoing. The Channel Tunnel Rail Link Act 1996 incorporated the widening and realignment of the A2 trunk road dual carriageway, which runs past Ebbsfleet International, and through my constituency on the old Watling street from London to the coast. The integration of the rail and road infrastructure was good news, but the actual construction has not been as well integrated as it might have been. People in Gravesham have endured traffic gridlock from the widening of the A2, and residents of local villages have at times been literally unable to leave their driveways because of gridlock on the rat runs used to avoid delays. The realignment of the A2 continues, with regular traffic jams stretching into Gravesend and just as far to the south on the other side of the A2. I hope continued construction of local infrastructure and future maintenance will continue; it will no doubt be required because the process will have a great impact on local people.
	I have probably dwelt a bit too much on construction, and I would like to focus on the regeneration of the local area, which was one of the arguments initially used for continuing to finance the tunnel rail link. Since then, of course, the Olympics have been sited in east London, where the other new international railway station is. I am concerned that financial commitments to support local regeneration may be channelled towards the Olympic site and away from Gravesham and north Kent. Although Ebbsfleet is situated in the Dartford constituency, it is right on the edge of the two main towns in my constituency, Gravesend and Northfleet. Most of the car parks are in my constituency, I am happy to say. The people of Gravesham have faced disruption caused by the construction, owing to the increased traffic flows needed to ensure high passenger numbers, and it is vital that they get some of the benefit from the regeneration. I hope that we can reaffirm the importance of regeneration in the area, particularly in north Kent, and that we do not simply see the process as another way of funding the Olympics.
	A new development of residential and commercial properties is planned surrounding the station, which in itself does not count towards the regeneration of the existing parts of Gravesham. In order to encourage inward investment for cultural outlets, about 2 million has been raised for a landmark sculpturean Angel of the South, if you likethat will be visible to passing motorists on the A2, but also to people on the trains. As residents in my constituency and that of my neighbours will have to look at such an iconic sculpture every day, it is most important that anything commissioned should get final approval by local people and elected officials on Gravesham borough council.
	The Office of Rail Regulation is currently able to provide very useful information about the use of Gravesend railway station. To the nearest thousand, it is calculated that just over 1 million people entered the station in 2004-05, about 1.3 million left it, and 9,000 people changed trains there. Last year those figures increased. Although those numbers may be interesting to trainspotters, they also show the increased use of Gravesend station, which should increase considerably when commuter services start using the link. They also show an average of about 10,000 more people coming to Gravesham than leaving it by train, and that migration can increase only when the morning commuting time from London Charing Cross to Gravesend falls to about 20 minutes.
	There appear to be plans for two trains an hour to call at Gravesend on their way to St. Pancras. However, those will start in Medway and other services will originate in other parts of Kent. It is not clear how many seatsor, more likely, standing placeswill be available for people from Gravesend. There is also the issue of the affordability of services from Gravesend to St. Pancras for local people. I hope that it will be made clear how many commuting places will be made available to passengers travelling from Gravesend and Higham to St. Pancras in order to offer protection for existing commuters so that they do not face an even longer commute from Gravesend.
	Finally, the Border and Immigration Agency has informed me that there are no plans to have a permanently manned immigration control at Ebbsfleet International railway station. I am concerned, therefore, that immigration officers will not be monitoring departures from Ebbsfleet International. I am also concerned that no one will be on hand to check arrivals should immigration checks not be satisfactorily completed on board the train or on the continent.

Kelvin Hopkins: I am very pleased to have an opportunity to speak about the Bill, and particularly to support the furthering of the Secretary of State's powers to fund the channel tunnel rail link and the trains that will run on it, post-construction.
	I must apologise, however, for not being able to be here at the beginning of the debate and for not having heard the speech of my hon. Friend the Minister, or that of the hon. Member for Wimbledon (Stephen Hammond). I was, however, pleased to be here when the hon. Member for Richmond Park (Susan Kramer) made her speech. I found it very interesting and I agreed with much of it. As I said in an intervention, if there is to be heavy subsidy, direct or indirect, for CTRL and the whole system, including the channel tunnel itself, there must be more Government involvement. It cannot simply be left in private hands, and in the longer run we might see the whole system integrated into a publicly owned railway system, but that is an argument for another day.
	I have taken a long-term interest in railways, and I am particularly pleased about the St. Pancras development for personal reasons because I have travelled on Thameslink from my Luton constituency for 37 yearsnot to this House for the whole time, of courseand it has been quite wonderful to see the regeneration of St. Pancras station. The hon. Member for Richmond Park said that she thought the case for the St. Pancras development had not been made. If the debate had taken place 15 years ago, there might have been an argument for developing a high-speed line from Waterloo rather than St. Pancras, but it has happened this way and my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), the Chair of the Transport Committee, has pointed out that many more people live on the north side than on the south side. I urge my hon. Friend the Minister to do everything he can to bring forward the development of Thameslink so that all those in the south of London can travel to the magnificent new station about to be opened at St. Pancras International. I travel through that station every day and it is really exciting to see it developing. It will open within days, and the process has been very encouraging.
	I like to think that I played some role in that process myself, because of the concrete box built underneath St. Pancras. It was always going to be there; it had to be built in order that the station could be developed at some future date. However, many of usI was one of those who lobbied most hard on this pointthought that it had to be developed and built at the same time as the opening of Eurostar services from St. Pancras. Otherwise, people would have had to walk from the appalling King's Cross Thameslink station, which was always temporary, at night, across one of the most depressing parts of London. I worked in the area for a long time, and we know that there is a degree of drug addiction and prostitution in that area that is very depressing.
	It was too much to expect travellers to go from King's Cross Thameslink to the Eurostar trains without new provision. The station had to be built to ensure that passengers had proper, decent access to St. Pancras station. I argued, as did others, that passenger traffic on Eurostar from St. Pancras could have been seriously damaged if the new station had not been built underneath St. Pancras with access via travelators, escalators and so on. I am therefore pleased that the station was built.
	The hon. Member for Richmond Park mentioned freight. Hon. Members may recall that I proposed in an Adjournment debate in January the development of the EuroRail Freight Route, which would put an enormous amount of freight that now goes by road on to the railways, and use the channel tunnel. We have made a submission, which is currently under investigation, to the Select Committee. I shall not go into more detail, but I believe that pushing vast amounts of freight through the channel tunnel would transform its economics, which would improve those of CTRL and of Eurostar services.
	There will never be enough passengers to justify the channel tunnel or the CTRL, so better use must be made of the tunnel for freight. All the forecasts at the beginning of the channel tunnel project were overblown: people argued that everyone would travel by train rather than plane in future. That was unrealistic. Many will travel by trainI shall use Eurostar as often as I canbut others will use aircraft and possibly still go by sea. However, there were never going to be enough passengers to justify building either the tunnel or CTRL. Freight had to be considered as a longer-term possibility. To realise the transportation of the sort of volume of freight that we are discussing, we must develop a delivery system on this side that is capable of taking full-sized containers and trailers on trains, and match the freight services and lines that have been developed on the continent. That is the future. I shall continue to pursue that and to support railroad developments in general.
	I greatly look forward to travelling from my constituency in Luton to St. Pancras and then to Paris, Brussels and elsewhere. We are discussing a wonderful development, which has given a genuine boost to the idea of modern railway development. Not so long ago, the Department for Transport seriously talked about railways as the mode of transport of the past. I exempt my hon. Friend the Under-Secretary from that charge. However, many civil servants were cited as saying that they were managing the decline of the railway system. That is not happening now. We know that rail is the transport mode of the future, not the past. Instead of the Department alone being enthusiastic, passengers have decided to use railways, and the demand is so great that the Government and the rail industry have to consider extra capacity. That is a wonderful development, which is good not only environmentally but socially and in every possible way. I look forward to further railway developments along those lines, especially that of a dedicated rail freight network linked to the channel tunnel and the continent of Europe.

Howard Stoate: I apologise for not being here at the start of the debate, but I was serving on a Statutory Instrument Committee. I am especially pleased to catch your eye, Mr. Deputy Speaker, because, as many hon. Members know, HS1 runs through the middle of my constituency, and Ebbsfleet International station is situated there. I therefore have several observations to make about a once-in-a-lifetime project, which can transform the lives of people not only in Kent but throughout the UK, provided that it is successful.
	The debate is about a Bill that will pave the way for the sale of the project. Its saleability will depend on its success, which is what I want to consider this evening. There are three key components to the project's success. The first is the extent to which it can bring new jobs, skills and regeneration, especially to Kent, which desperately needs regeneration and has a significant skills shortage. To what extent can the high-speed rail line achieve that? I believe that, if we get it right, we can create a blueprint for many projects that will benefit the country.
	The second major component is modal shift. It is a jargon term, which effectively means the extent of the project's success in changing people's travelling habits, away from aeroplanes or private cars to public transport, and high-speed rail links in particular. That is crucial and much more work needs to be done to ensure that modal shift occurs. Another project in my constituency is the fast-track bus routea rapid, dedicated bus service between the constituency of the hon. Member for Gravesham (Mr. Holloway) and mine. It has been fantastically successfulpassenger numbers are 50 per cent. above those predicted. However, it is more interesting to note that there has been at least a 10 per cent. modal shift. In other words, 10 per cent. of current journeys on the fast-track bus system are made by people who would previously have used their car. A significant shift in travelling patterns away from private car usage to rapid, clean, efficient public transport is already occurring. I believe that HS1 can also offer such an opportunity. In two years, when the 17-minute commuter service from Ebbsfleet to St. Pancras operates, it will offer a further opportunity to get away from the overcrowded, rather dingy trains on the North Kent line and reach the centre of London much more quickly, in more comfort and in a way that is a model for others.
	The third and perhaps most important major component is the extent to which inward investment in projects such as HS1 benefit existing communities as much as new ones. In my constituency and in that of the hon. Member for Gravesham, there is huge inward investment, and plans to build up to 30,000 new homes and provide up to 20,000 or 30,000 new jobs, as well as massive improvement of derelict infrastructure, which sorely needs regeneration. However, can we benefit existing communities to the same extent as we benefit new communities? The hon. Member for Ashford (Damian Green) made the important point that, in many instances, people who live along the route of new lines do not benefit at all. They take the mess, noise, inconvenience and disruption to their lives and get little in return. It is vital to avoid that when we build such new projects. The hon. Gentleman was right to say that we had five, six or seven years of uncertainty about the routewhether it would be A, B, C or D, which homes would be blighted, bought or knocked down and which people would be moved. It was a nightmare for many years until the route was fixed. We must find a better way to tackle those planning issues to ensure that, once such a project is agreed, the minimum disruption is caused for the minimum time and affects as few people as possible.
	The problem with many projects is that those who face the most disruption experience the least benefit. Unfortunately, that is largely true in my constituency. Despite the enormous investment, improvements and opportunities for people, many of the existing, settled communities do not feel the benefit of the regeneration projects. They still live in overcrowded areas, face the extra noise, traffic and pollution that the new projects generate and do not yet experience the good. If we are to produce more new projects in future, it is essential that existing communities in the areas that we regenerate perceive from day one what is in it for them. What new jobs will they get? What improvements will be made to their housing infrastructure? How will their schools and hospitals be rebuilt and regenerated? How will their shopping centres be upgraded? That must be clear from the beginning.
	The rail link is a major part of the Thames Gateway project, which has had a mixed press over the years. Indeed, recent reports have stated that perhaps we have not maximised the benefit or achieved the genuine vision that we should have realised. If we are to get people on side and to understand exactly what can be achieved, we must ensure that they benefit before rather than after the new communities.
	The way to do that is, first, to iron out some of the planning issues, to ensure that regeneration projects are swift and effective, that local people are involved in planning and that there is the minimum disruption for the minimum time. However, we also have to ensure some early wins, so that people already living in the communities affected get some quick benefits, before we start to introduce the big changes. Obvious examples of that include the fast-track bus system, whereby communities are linked to town centres and new developments. We must ensure that investment in our town centres is made before the extra building and development, so that people can see improvements in their towns first. It is a question of direction of travel and of ensuring that we build the infrastructure that benefits people's lives before we build the other parts. If we can get those things right and in the right orderEbbsfleet and north Kent are good examples of where we can do just thatand thereby ensure that local people benefit from new investment from the off, we will bring huge benefits to the country.
	I finish by paying tribute to the work that the Government have done to ensure the delivery of the project. It has worked, and there is a fantastic future for High Speed 1. I think that there will be High Speeds 2, 3, 4, 5 and who knows how many more. Local communities can be shown how they can benefit, but we must ensure that we get those important issues right before we, to make a pun, railroad ahead with future expansion.

John Horam: Like the hon. Member for Dartford (Dr. Stoate), may I apologise to you, Mr. Deputy Speaker, and to the House for not being present during the opening speeches?
	I should like to seize this opportunity to make a brief point to the Minister about the exponential growth of traffic on the railways. I welcome that and agree with all the remarks that have been made about this coming to be the age of the train. That has been forecast for many years and in future years it may well be true. However, in referring to that growth of traffic, I should like to bring home to the Minister the need to strike a balance between the exciting new high-speed projects of the kind that we are rightly celebrating and the more mundane expansion of existing facilities.
	In my constituency, which is an area of heavy commuting into central London, there is an issue concerning the Thameslink scheme. I understand that it will now be completed in two stages, with Borough market junction being completed before the Blackfriars bridge part and the rest of the scheme. I urge the Minister to recognise that the two schemes go together. It is not enough to complete the Borough market bit, which will only add a certain amount of capacity. The whole Thameslink scheme must be completed as one item. I want the Minister to consider that, because commuters in London occasionally feel neglected, next to the exciting high-speed schemes that we all welcome. I would not like the Minister to forget them in the next few years.

Julian Brazier: As we complete this debate some three hours early, it is worth reflecting on how transport business is again finishing early, with the Government still telling us that they have not found the time anywhere to fit in the harbours Bill, which they allegedly support. Should the harbour revision orders, on which we are supporting the Government, run into trouble, they will have themselves to blame for not introducing that necessary modernisation.
	I am aware of a certain sense of irony today. One of the most vivid experiences of my parliamentary career was leading a little gang of just 16 MPs with my colleague David Shaw, the then Member for Dover, in a rebellion against the final stages of the then Channel Tunnel Bill. As the right hon. Lady was then the leader of the Conservative party, it was quite an experience. Nevertheless, Eurotunnel was big enough to invite me to the opening. It would be impossible not to be impressed by the sheer scale of the engineering, even if the delays and cost overruns were well in excess of what David Shaw and I predicted in our letter to the  Financial Times, which caused a certain flutter and started the argument.
	Unlike then, today I join the Minister and my hon. Friend the Member for Wimbledon (Stephen Hammond) in congratulating LCR on getting the high-speed link in on time and pretty much to budget, which is a remarkable achievement. The link will provide a faster service to the continent and for those who have taken part in this debate who want the railways to prosperthat is, everyone who has taken partit is a heartening sight. I also welcome the opportunities for my county, and the prospect of trains taking one hour from Canterbury West is extremely attractive. However, I shall return to the concerns that I share with my hon. Friend the Member for Ashford (Damian Green) about the situation there.
	My concern 20 years ago was that the channel tunnel would not prove to be commercially viable and would have to rely on a large amount of public subsidy. Ironically, that point is borne out by clause 1, which confirms the Secretary of State's right to fund the channel tunnel rail link and its trains, which is something against which we are not arguing against now. The aim of clause 1, as the Minister made clear, is to maximise the value of the asset. In that respect it is a sensible tidying-up measure.
	The fact that the port of Dover has, against a number of predictions made at the time, done so well and continues to prosper is a tribute to the management there. The fact that we still have a successful Dover and many low-cost airlines has put the rail link to France and Belgium under pressure. Although numbers have recovered from the low point of just over 6 million to a little under 8 million last year, it should be remembered that the Government's 1998 projections were for 9 million passengers under the downside case and for 8 million under the low case, just above the current level.
	That said, when Richard Brown took the trouble to come and put the case for Eurotunnel in my constituency it was rather sad that, in giving the rather gloomy tale that forms the background to my hon. Friend's concerns, he emphasised the poor passenger numbers as a reason whysurprise, surprise, now that Ebbsfleet had been builtservices from Ashford to Brussels had been entirely wound up and redirected to Paris. That was especially sad, because other parts of the industry sufficiently affected by low-cost airlinesthe premium airlines, for instanceare reputedly looking into rail. Guillaume Ppy, the head of France's SNCF has hinted that Air France is considering launching arrivals through the channel tunnel once Eurostar is opened up to competition in 2010. Indeed, Air France has already started a parallel process, with a shift from air to rail in its link from Paris to Brussels. My hon. Friend made the point strongly that his constituents and mine, as well as people throughout east Kent, are deeply concerned about the loss of services from Ashford. I have considerable sympathy for the points that he made. However, Eurostar must ask itself how others, including airlines, are seeing a commercial opportunity there while it is cutting back.
	The Secretary of State's power to grant subsidies is significantly reinforced by clause 1. With all the tales of woe that we have heard, I should like to echo the question that my hon. Friend the Member for Wimbledon put about whether train operating companies are included in the measure and whether the Minister envisages it involving any extra public funding. I ask that becauseI see that the right hon. Member for Norwich, South (Mr. Clarke) has just resumed his placeno money resolution has been tabled with the Bill and a number of the items raised in the debate, if not the contents of the Bill themselves, involve spending extra money.
	Issues surrounding the interchange at Stratford closely parallel those around the use of Ebbsfleet and, more particularly, Ashford. A powerful case has been made that if we are to see the regenerative benefits, one way or another, those issues need settling, but I see no reason why that should mean public money.
	Another matter to consider is how things will develop in respect of subsequent high-speed links. My hon. Friend the Member for Wimbledon announced our clear commitment to a feasibility study, which means exactly what it saysthat we will look into it, but that we are not committing ourselves beyond that. I remind one or two of the more enthusiastic speakers of the wise warning of my hon. Friend the Member for Ashford: if there is one thing to avoid next time, it is putting lots of alternative routes on a map and then spending years discussing them. Even in my end of Kent, we felt the backwash of the sheer fury generated in west Kent.
	A smaller matter that needs clarifying is the exact relationship between the channel tunnel rail link and the Office of Rail Regulation. On the one hand, clauses 2 and 3 seem to entrench the channel tunnel outside the remit of the ORR, but on the other, clause 4 provides for the regulator to levy charges on the channel tunnel. I would be grateful if the Minister would pick that point up in his concluding speech.
	The issue of freight came up about five times in our debate, but the Minister hardly touched on it at all in his opening speech. You would rightly restrain me, Mr. Deputy Speaker, if I were to broaden my speech too much into a wider discussion of the issues surrounding freight, but I saw parallels between the remarks of several Members on this measure and the position of our ports. The complaint is, frankly, that no legal framework is in place to allow port operatorseven those forced to spend large sums on infrastructureto negotiate long-term rail paths. I am aware of a discussion document that deals with the issue, but it offers a short-term and very complicated solution. I believe that there is a parallel, so I would be grateful if the Minister would clarify whether the Bill helps in any way to deal with the problem of encouraging more rail freight.
	This is a short and uncontroversial Bill, so the Opposition are happy to support it.

Tom Harris: We have had an excellent and probably too short debate. I will try to respond to as many contributions as possible in the next two or three hours and eight minutes!
	The hon. Member for Wimbledon (Stephen Hammond) made an excellent and helpful contribution and I would like to echo his tribute to Rob Holden and his team at London and Continental Railways for the outstanding work that they have completed on High Speed 1. The hon. Gentleman asked about the future of the Government guaranteed debt, which currently amounts to about 6.1 billion. It is likely that the Government will continue to guarantee the existing debt. He and others, including the hon. Member for Canterbury (Mr. Brazier) and my right hon. Friend the Member for Norwich, South (Mr. Clarke), asked about the implications of clause 1 for the Secretary of State's role. Let me clarify that the clause does not change in any respect the existing arrangements for subsidies; it clarifies that the Secretary of State has that power. It is the Government's intention that that clarification should be seen as applying to domestic services operating on HS1. It does not mean that the Government have any long-term intention to offer public subsidy to Eurostar.

Charles Clarke: rose

Tom Harris: If my right hon. Friend will forgive me, I would like to make some progress and I was generous in giving way during my opening remarks.
	Let me clarify the role of the Office of Rail Regulation, about which several hon. Members have asked. As the hon. Member for Canterbury rightly says, clause 2 entrenches the existing position that CTRL or HS1 will not be regulated by the Office of Rail Regulation. It will, however, continue to be the safety regulator and the appeal body for any train operating companieswhether it be Eurostar or any otherthat feel that the charging regime is unfair. Clause 3 will allow the ORR to make charges specifically for its own services and not for track access charges.
	My right hon. Friend the Member for Norwich, South, who made an excellent contribution, obviously feels very strongly about Stratford International. This may not be news to anyone in the House, but I am not aware of any plans by Eurostar to provide any international services from Stratford International. I understand that Eurostar has committed to looking again into whether there is a demand for such services from that station. In that respect, my right hon. Friend is absolutely right that there is a correlation, as the hon. Member for Ashford has already said, between that and the position in Ashford. I come back to my earlier comments. Clause 1 clarifies the Secretary of State's role and responsibility for funding services on CTRL, but it does not in any way oblige that person to fund capital improvementsin Stratford International or anywhere else.

Charles Clarke: I am grateful for my hon. Friend's clarification. As I understand it, the Secretary of State has two types of power. The first is to subsidise the operating costs of services, which I believe is what my hon. Friend was referring tothough I may be wrongand the second is to provide capital support for particular developments to make the services run better. If I have understood that correctly, I should make it clear that I was referring only to the capital commitment that would be relevant to achieving the interchange at Stratford. I was not referring to subsidising operating costs or anything of that kind. Will my hon. Friend clarify whether I am right that the Secretary of State has the power to provide capital for those developments at Stratford station?

Tom Harris: I will clarify the position. My understanding is that my right hon. Friend is correct in that those powers are available for the Secretary of State to use. However, the wording of clause 1 was adopted specifically in respect of arrangements for subsidies to domestic services. That is the purpose of clause 1. My right hon. Friend feels strongly about this issue, but I think that he should be wary of demonstrating too strong an interest as there are a number of Whips in the Chamber and they may interpret his remarks as his volunteering for Public Bill Committee duty. Of course, I would welcome my right hon. Friend's presence on such a Committee.

Stephen Ladyman: Returning to the matter of the interchange between Stratford International station and Stratford regional station, I do not care whether the Minister provides the subsidy to link the two on account of the domestic service or on account of the international service. All I want is the two stations linked.

Tom Harris: That seems quite a reasonable position to adopt. I refer my hon. Friend to my earlier answer, as I understand that the procurement process is under way for a supplier and there is a possible contractor to provide the link that he so craves, but I cannot guarantee whether there is going to be a travolator, a moving pavement or whatever.
	The hon. Member for Richmond Park (Susan Kramer) talked about passenger growth predictions, which goes to the hub of the issue that arose in 1998 when the previous financial arrangements for building the channel tunnel rail link collapsed. Inevitably, predictions of passenger growth were too optimistic. In 1994, when passenger services first began, it was estimated that 21 million people would be using Eurostar by 2010. That prediction has had to be reviewed and it is now expected that 10 million people will use Eurostar services by that date. That shortfall led to a lack of confidence in the economic underpinning of the deal that was put together in 1996.
	I challenged what the hon. Lady said about the risk to growth resulting from the move to St. Pancras. I do not think she can have it both ways. In the absence of an immediate start to work on high-speed links to the north, the location of St. Pancras as a terminal for Eurostar services will be of great benefit not only to Londoners but, crucially, to people living north of London. Even people in my constituencyand certainly those living in the north of Englandfind it easier to travel to Euston and King's Cross and then on to St. Pancras than to arrive at either of those stations and then take the underground or a cab down to Waterloo International.
	I entirely agree with what the hon. Lady said about the importance of freight. Of course it is in everyone's interest for us to manage a major shift from road to rail. As the hon. Lady will know, in the high-level output specification announced in July we have committed 200 million to developing a strategic freight network, and various grants have already been made in the past few weeks to encourage gauge changes on existing freight lines.
	The hon. Lady asked whether the proceeds of any future sale could be put towards the development of a high-speed network. She predicted a substantial bonus for the Treasury from the sale of LCR or its component parts. She should bear in mind that the Government gave LCR a 3 billion grant during construction, and has already assumed 6.1 million of debt. However significant the windfall from the sale of LCR may be, I am not sure how much will be left over for any such project.
	My hon. Friend the Member for Carlisle (Mr. Martlew) who is a doughty promoter of high-speed lines on the basis that all of them will stop at Carlislegave an eloquent and enthusiastic account of his reasons for supporting high-speed links. He spoke of the evidence that Sir Rod Eddington gave to the Transport Committee. He was, of course, right to clarify what Sir Rod said about high-speed lines. He did not rule them out; although I think he did rule out maglev as a technology. Maglev is slightly different from high-speed lines. I do not demur from Sir Rod's view that high-speed lines may well have a role to play, but I believe that its role would involve meeting increased capacity demands rather than the environment or connectivity.
	The hon. Member for Ashford (Damian Green) understandably raised, again, the unfairness with which he feels his constituency has been treated by Eurostar. I echo what was said by my hon. Friend the Member for South Thanet (Dr. Ladyman). Whether he admits it or not, the hon. Gentleman is completely at odds with his colleagues on the Front Bench, who constantly tell the Government every month during Transport questions that Ministers should not be micro-managing the railway. We should not be writing timetables. I agree with that, and we do not do it: that is why we do not specify the timetable for Eurostar.
	The hon. Gentleman should be aware that even with the revised service at Ashford, 33 per cent. more Eurostar services stop in Kent as a result of the opening of Ebbsfleet. He also asked about the role of the Office of Rail Regulation, which I hope I have now clarified.

Damian Green: The Minister did kindly deal with the ORR's role, but may I ask him a more general question? Would the Government welcome the introduction of competitive services on the high-speed line?

Tom Harris: That is an excellent question, which has not been asked today until now. The answer is yes, I would welcome competition with Eurostar. A great deal of capacity is available on High Speed 1, and I foresee competition at some time in the future. I believe that it would offer a good deal to passengers.
	My hon. Friend the Member for Leicester, South (Sir Peter Soulsby) expressed enthusiasm for the opening of St. Pancras. He predicted, or at least requested, a change in policy on high-speed lines from me before I sit down this evening. I am sure he will not be surprised if I disappoint him by telling him that my position is the same as it was three hours ago.
	The hon. Member for Gravesham (Mr. Holloway) supported the link, and gave an excellent description of the way in which high-speed lines can benefit local communities. He also mentioned some of the possible disbenefits of their construction, but he spoke enthusiastically about the benefits to his consumers from the domestic services that will start in December 2009.
	I like listening to my hon. Friend the Member for Luton, North (Kelvin Hopkins) when he talks of railways in general, but particularly when he talks of freight. He has an in-depth knowledge that far surpasses mine, and his insights are always interesting. He spoke of his wish to see vast quantities of freight travel through the tunnel. The Government want that as well, but, more important, we want it to happen on a commercial, profitable basis, because that is the only way in which it can be sustainable in the long term.
	I also commend my hon. Friend for being the only person on the planet who still uses the word railroad.
	My hon. Friend the Member for Dartford (Dr. Stoate) produced an incisive analysis of what is happening to high-speed rail. He spoke of the regeneration aspects, and the importance of modal shift. The fleetingly present hon. Member for Orpington (Mr. Horam) spoke of the importance of not forgetting the traditional non-high-speed network, asking me not to forget Londoners. Given that we are spending 5.5 billion on Thameslink and another 5.1 billion on Crossrail, and that about 900 of the 1,300 new carriages to be purchased under high-level output specification will come to London and the south-east, I hardly think that that allegation holds much water.
	The hon. Member for Canterbury (Mr. Brazier) began by asking about the harbours Bill. I have a very large remit, and I hope he will forgive me if I do not extend it unilaterally to harbours.
	This has been an excellent debate, and I am extremely proud to be the railways Minister who happened to be in position when St. Pancras and the high-speed rail link opened. I put it in those terms because I cannot claim to be the driving force behind the creation or the building of the link. Nevertheless, it is a privilege to have been a member of the Government at such a time.
	The channel tunnel rail link is one of the largest construction projects ever completed. Completing a project of this size within time and budget is an achievement in itself, and we should celebrate its success. At last we have a high-speed rail link to shout about, a train service that links the country to Europe at up to 186 mph. St. Pancras has been transformed, and its position on the transport network means that people living in the north of Englandand, I hope, Scotlandcan buy a single ticket at their local station and go all the way to Paris without the trouble of crossing London. We have a regeneration investment estimated at 10 billion, which is being spent on bricks and mortar in some of the most deprived areas in the south-east.
	Apart from all those benefits, we have the opportunity to gain a tangible financial return on taxpayers' investment. The Bill kicks off a programme of work that will last at least three years. Through restructuring, we will secure the long-term future of the channel tunnel rail link projecta project that has delivered, and will continue to deliver, real benefits for the country, and a project of which we should all be proud.
	I commend the Bill to the House.
	 Question put and agreed to.
	 Bill accordingly read a Second time.

CHANNEL TUNNEL RAIL LINK (SUPPLEMENTARY PROVISIONS) BILL (PROGRAMME)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A(7)  (Programme motions),
	That the following provisions shall apply to the Channel Tunnel Rail Link (Supplementary Provisions) Bill:
	 Committal
	1. The Bill shall be committed to a Public Bill Committee.
	 Proceedings in Public Bill Committee
	2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 11th December 2007.
	3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
	 Consideration and Third Reading
	4. Proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
	6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.
	 Other proceedings
	7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed. [Alison Seabeck.]
	 Question agreed to.

CHANNEL TUNNEL RAIL LINK (SUPPLEMENTARY PROVISIONS) BILL (WAYS AND MEANS)

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a) (Money resolutions and ways and means resolutions in connection with Bills),
	That, for the purposes of any Act resulting from the Channel Tunnel Rail Link (Supplementary Provisions) Bill, it is expedient to authorise the charging of fees by the Office of Rail Regulation in respect of the exercise of its functions in relation to the rail link. [Alison Seabeck.]
	 Question agreed to.

DELEGATED LEGISLATION

Mr. Deputy Speaker: With permission, I shall put motions 4 to 6 together.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Road Traffic

That the draft Civil Enforcement of Parking Contraventions (England) Representations and Appeals Regulations 2007, which were laid before this House on 24th July, in the last Session of Parliament, be approved.

Prevention and Suppression of Terrorism

That the draft Proscribed Organisations Appeal Commission (Procedure) (Amendment) Rules 2007, which were laid before this House on 9th October, in the last Session of Parliament, be approved.

Immigration

That the draft Special Immigration Appeals Commission (Procedure) (Amendment No. 2) Rules 2007, which were laid before this House on 9th October, in the last Session of Parliament, be approved. [Alison Seabeck.]
	 Question agreed to.

MICHAEL SHIELDS

Motion made, and Question proposed, That this House do now adjourn. [Alison Seabeck.]

Louise Ellman: I am grateful for the opportunity to press once again the case for justice for Michael Shields. Michael was 18 years old when, in July 2005, the Varna court in Bulgaria found him guilty of the attempted murder of barman Martin Georgiev at the Big Ben cafe, Golden Sands at around 5 am on 30 May 2005. A sentence of 15 years' imprisonment and a fine with compensation equivalent to 80,000 was imposed.
	It was alleged that Michael dropped a large rock-like stone on the head of Martin Georgiev after Mr. Georgiev had been knocked to the ground, causing a life-threatening injury. Michael has always claimed he was asleep at the Crystal hotel when the attack was carried out. Although the sentence was reduced to 10 years on appeal, the conviction stands, and after paying the fine and compensation with interest, Michael is now serving his sentence in prison in the UK.
	I am convinced that there has been a miscarriage of justice. That is why I repeatedly raise Michael's case in Parliament and work with Michael's excellent legal teamPete Weatherby, John Weate, and Fair Trials Internationaltogether with Liverpool councillor Joe Anderson and Arlene McCarthy, MEP for the north-west region, to seek a retrial or pardon.
	Michael continues to receive strong support from the Bishop of Liverpool, the Right Reverend James Jones, who has visited him in prison in Bulgaria and in the United Kingdom. He believes Michael is innocent and has spoken to him at great length; he strongly supports the calls for his release and has raised the issue in the other place. I also thank the Bulgarian ambassador, Dr. Matev, for his courtesy and helpfulness in assisting me in pursuing this matter.
	My previous representations to this House have explained the reasons for my concerns about Michael Shields' conviction. These include the absence of forensic evidence and reliance on uncorroborated, selective witness identification. Some of the identification evidence was secured by witnesses being asked to look at the dock and indicate whether the defendant was the offender. That is known as dock ID. The practice has not been allowed in the UK for about 40 years. Flawed procedures include Michael being exposed to public view prior to his identificationindeed, the police took him to the scene of the crime, where he was seen by members of the public, before any trial or identification parade took placewitnesses not being separated before giving evidence and being asked to identify Michael, and the absence of other people bearing any physical resemblance to Michael in the identification parades. There was no legal representation when some of these procedures were conducted.
	Today, I shall concentrate on new evidence strengthening the concern that Michael's conviction is unsafe. I will name those identified by new witnesses as the two guilty men. I will also register two new pieces of evidence supporting Michael that are currently being prepared by his legal team.
	In my speech in this House on 24 November 2005, I referred to the powerful notarised eye-witness statement from Mr. A, received after the trial had concluded. It details the events of that fateful night, and it backs Michael Shields. To date, no court has considered that evidence. Mr. A has not been questioned. He is willing to give evidence and to speak about what he has testified he saw on that night.
	Four new witnesses support Michael's case. One backs Michael's claim to have been in bed in his hotel room at the time of the attack on Martin Georgiev. Another new witness, a hotel porter, also supports Michael's account that he was in the hotel at the crucial time. Michael's lawyers are currently preparing the appropriate statements and video evidence. The most dramatic new evidence, however, from two eye-witnesses present at the scene of the crime, relates to the strange case of Graham Sankey.
	Graham Sankey came to the attention of the Bulgarian authorities on the night Martin Georgiev was attacked. He, together with three others, was questioned by the Bulgarian police before being released. Two of them, Bradley Thomson and Anthony Wilson, were subsequently found guilty of lesserpublic orderoffences and returned to the UK. The Bulgarian authorities renewed their interest in Graham Sankey as preparations were being made for Michael Shields' trial. A letter I received from the Home Office on 16 August 2005 confirmed that the Bulgarians had issued summonses for Graham Sankey and others to appear at the trial on 21 and 22 July. The letter confirmed that the usual six weeks' notice required had not been given and the summonses were not served. Graham Sankey remained at home in Liverpool while Michael Shields went on trial for attempted murder in Bulgaria.
	After Michael was found guilty of the attempted murder of Martin Georgiev, Graham Sankey, speaking from the safety of Liverpool, issued a statement through his solicitor. In the statement, which he entitled his Confession and which was dated 28 July 2005, he admitted:
	I accept I must have caused serious injury to Mr. Georgiev. I read in the papers about Michael Shields' trial and I felt that I could not let an innocent man take the blame for what I had done.
	Graham Sankey has never been questioned about his confession, and it was later reported that it had been withdrawn.
	There is now, however, a dramatic new development. On 12 October 2007 a respected citizen of Liverpool signed a witness statement. It reports that Bradley Thomson and Anthony Wilson, both present at the scene of the crime and found guilty of lesser offences, claim that two men were responsible for the attack on Martin Georgiev. According to the statement, they allege that Steven Clare had punched Martin Georgiev and:
	Shortly afterwards Graham Sankey dropped a large rock on his head as he lay prone on the ground.
	The statement continues:
	Both men made it clear that Michael Shields was not present at the scene and that neither of them knew him.
	The statement also says that Mr. Sankey was an associate of theirs at the time and that they had been out drinking with him. Those dramatic allegations reinforce the case to revisit the conviction of Michael Shields. They point the finger firmly at Graham Sankey. These allegations must be subject to judicial investigation.
	I and others have appealed to the President of Bulgaria to grant Michael Shields a pardon. I understand that a pardon is the only available mechanism to free Michael. A recent amnesty has been issued in Bulgaria. In addition, the President has the power to grant pardons in certain circumstances.
	On 31 October 2007, Mr. Sasha Penov, chairman of the legal council for the President of Bulgaria replied to meI understand that similar letters were received by others who had made requests for a pardon for Michael. Mr. Penov did not give a definitive decision on the request for a pardon but suggested that it could be considered by the UK Government under the provisions of the convention on the transfer of sentenced persons, including article 12 of the Council of Europe convention. Yet when I raised this issue in business questions in the House on 16 November, the Leader of the House replied that such decisions must be made by the convicting authorityin this case, Bulgaria. This situation is extremely confusing and distressing for Michael and for all those campaigning for him. Who has the authority to issue a pardon?
	I received today a reply to a written question that I tabled in this House seeking information on whether such a pardon has ever been exercised by the United Kingdom. It states that no prisoner transferred to the United Kingdom under international prisoner transfer agreements has subsequently been pardoned by the UK authorities. That, however, does not mean that such a pardon could not be given, provided that the statement given by the representative of the President of Bulgaria is in fact correct.
	Both United Kingdom domestic and European conventions uphold the principle of the presumption of liberty. This means that those holding prisoners must justify their detention. If the UK Government doubt the strength of the case against Michael Shields, I ask them to consider acting in two ways: to consider supporting the existing application to the Bulgarian authorities for a pardon for Michael Shieldsit has been submitted by many people and has very strong supportbut also to consider whether they can act in their own right, as suggested in the letter to me from Bulgaria. I understand that a royal pardon can be requested on the advice of the Secretary of State for Justice, and that the Criminal Cases Review Commission could be asked for a view as part of that consideration.
	I want to place on the record my thanks to the Government for their assistance in responding to my previous requests on this matter. This includes speeding up Michael's transfer from Bulgaria, recalculating the length of his sentence and acceding to his request to undergo a polygraphlie detectortest. Michael is adamant about his innocence and is willing to do anything possible to demonstrate that. Ministers in the Foreign Office, the Ministry of Justice and the Home Office have always been supportive in responding to my queries, and I thank them for that. I now ask, however, that the Government recognise the mounting and compelling new evidence that makes Michael's conviction unsafe. Michael's fate must not hang in the balance while Bulgaria and the United Kingdom debate their respective jurisdictions and conventions. Michael has strong support in his community, and his family are outstanding in their efforts. More than 16,000 people have signed the Downing street petition supporting Michael's release. I am convinced of Michael's innocence. Those who are unconvinced must surely accept that his conviction is unsafe.
	I call on my right hon. Friend the Minister to clarify the situation. My right hon. Friend the Secretary of State for Justice has already agreed to meet me to discuss Michael's position, and I thank him. I will not rest until justice has been done, and nor will Michael's family and supporters. I ask my right hon. Friend the Minister to work with me to secure justice for Michael Shields.

David Hanson: I begin by thanking my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman) for raising the case of Michael Shields today. Self-evidently, she feels passionately about Michael's case following his conviction in Bulgaria in 2005, and she has raised his case with me previously in private discussions, and with other Ministers and ministerial delegations. She is indeed working tirelessly on behalf of Michael and his family. She has also raised concerns on behalf of Councillor Joe Anderson and Arlene McCarthy MEP, who have been particularly supportive of Michael's case and have raised these issues with the Government; whatever I say this evening, they will undoubtedly continue to do so. My hon. Friend also mentioned the noble Bishop of Liverpool, who sits in another place, where he too has raised this matter. Again, I know that he is committed to raising Michael's case at every opportunity.
	As my hon. Friend said, Michael Shields was convicted of the attempted murder of a Bulgarian national. Mr. Shields was returning from a football match in Turkey when he became involved in a stone-throwing incident that resulted in the serious injury of Martin Georgiev. Mr. Shields maintains his innocence, and his family and other supporters have mounted a strong and effective campaign to prove his innocence. As my hon. Friend said, a fellow Liverpool fan, Graham Sankey, who was arrested with Mr. Shields but released without charge, subsequently issued a statement indicating that he may have been involved in an incident that resulted in the injury to Mr. Georgiev. However, he has refused to give a witness statement and subsequently withdrew his earlier statement.
	Let me say right away that I am well aware of the strength of feeling that Michael's case arouses in Liverpool. My constituency is very close to Liverpool, which is the city of my birth, and I understand well the feelings that have been expressed. My hon. Friend and others have put forward the view that Michael is the victim of a miscarriage of justice. That strength of opinion is amply demonstrated by the petition on the Downing street website, which as of today has more than 16,000 names appended to it.
	My hon. Friend will be aware that the Government have tried wherever possible to ensure that Michael has received appropriate help and support. I am genuinely grateful to my hon. Friend for acknowledging in her speech the assistance provided not just by my Departmentthe Ministry of Justicebut by the Foreign Office and the Home Office. She will be aware that once the Bulgarian authorities consented to transfer Michael back to the UK, we attempted to do that quickly and without unnecessary delay on our part. Arrangements were indeed put in place to transfer him to a prison in the north-west of Englandin his home regionwithin 24 hours of his arrival in the UK, so that he could, quite properly, receive visits from his family and friends at a convenient time. Michael continues to serve his sentence in a prison close to his home.
	As my hon. Friend said, now that Michael has turned 21 he has been transferred to an adult prison where I understand that he is taking advantage of the educational and training facilities available to him, while working towards the possibility of one day transferring to an open prison. When my hon. Friend and I discussed that possibility, I explained to her how it could occur in the near future.
	My hon. Friend also raised the issue of Michael's undergoing a polygraph test, which we have been pleased to grant. The governor of Garth prison has indicated that she is in principle content for the test to go ahead, provided that the chosen polygraph expert and any individual accompanying them are security-cleared. That will undoubtedly be acceptable to my hon. Friend and to Michael. I believe that there has been a request for that test to be filmed, but there is no question of that happening. However, I hope that the test itself will prove of value and that it can be undertaken speedily.
	It is clear from my hon. Friend's speech tonight, however, that Michael's supportershis family and many people in the city of Liverpoolfeel that further action should be taken to remedy what they believe to be a serious miscarriage of justice. I am grateful to my hon. Friend for setting out the new evidence that has recently come to light. I know that she knows this, but I have to say to her that the proper place for that evidence to be considered and tested is in Bulgaria, either by a Bulgarian court or, if that is not possible, by the Bulgarian President, who has the power to grant clemency.
	One of the central principles of the Council of Europe convention on the transfer of sentenced persons, under which Michael was transferred to a prison in the United Kingdom, is that the receiving state must respect the findings of the sentencing state. Indeed, article 13 of the convention makes it clear that the sentencing state alone retains the right to review the judgment of its court. Under the terms of that convention there is limited scope for the receiving state, which in this case is the United Kingdom, to change the sentence imposed by the sentencing state. A sentence can be adapted where the sentence imposed exceeds the sentence available to courts in the receiving state for the same offence. My hon. Friend will know that Michael is serving a sentence of 10 years for attempted murder. As the maximum sentence available to British courts for attempted murder is life imprisonment, we have no power to reduce Michael's sentence on those grounds.
	My hon. Friend mentioned that following Michael's return to the UK, his sentence is administered in accordance with British release arrangements. She is aware that following strong representations from her and others, some of whom I mentioned, the Government were able to amend Michael's release dates to ensure that he serves no longer in custody here than would have been the case had he remained in Bulgaria. That decision has shortened Michael's sentence, and I know that my hon. Friend has welcomed it.
	The central point that my hon. Friend made concerned the potential for a royal prerogative of mercy. She has asked for clarification on whether the Justice Secretary could grant a pardon to Michael under a royal prerogative of mercy. As hon. Members will know, there are different types of pardon, but I assume that my hon. Friend would be seeking what is known as a free pardon, which would remove, as far as possible, all penalties and other consequences of the conviction. I hope that it is helpful my saying that a request to grant a free pardon to a repatriated prisoner is highly unusual, and that such a request has never been granted. My hon. Friend mentioned that I gave her my answer to a parliamentary question today, and in it I re-emphasised the situation to her.
	Although the Bulgarian Government have quoted article 12 of the convention on the transfer of sentenced persons, that does not address the question whether the grant of a pardon to a repatriated prisoner is possible or appropriate under UK law. I do not wish to give Michael false hope. I know that this will be difficult for my hon. Friend and her constituent to hear, but I have to say honestly to them that it appears very doubtful whether the power to grant a free pardon extends to people convicted overseas and serving their sentence in the UK, as Michael is now doing following his conviction in Bulgaria and his imprisonment in the north-west.
	Furthermore, free pardons are granted only in very restricted circumstances, and without prejudging Michael's circumstances, they may well not yet meet them. As ever, I want to help my hon. Friend, because of both her passion and commitment to Michael's case, and the strength of feeling of her constituents, which she represents to this House. If she wishes, I can write to her with clarification of how the royal prerogative of mercy is applied, so that Michael can consider whether he wishes to exercise that potential option.
	My hon. Friend also asked whether the Government would consider supporting Michael's application to the Bulgarian authorities for a pardon. As she has mentioned, Michael's family are considering whether to apply to the Bulgarian President for that consideration. The decision on whether such support for an application can be provided is a matter for my right hon. Friend the Foreign Secretary. I understand that both he and his officials are aware of Michael's application to the Bulgarian authorities and are awaiting further information before making their decision on whether to support it. That information will come from, among others, Fair Trials International. I hope that that will be sorted shortly, so that my right hon. Friend can make a decision. I hope that my hon. Friend will both pursue the matter directly with the Foreign Secretary and supply further information as requested.
	I have tried to indicate to my hon. Friend that my Department and others responsible for issues relating to Michael's welfare and condition have examined the matter seriously, and are attempting to ensure that his sentence is appropriate and that his well-being is maintained while he is in prison. We must examine still further the issue of representations to the Bulgarian authorities and the question of the royal prerogative of mercy. I am sure that both my hon. Friend and her constituent will be able to make further representations to the Government in due course about any concerns about Michael's position that are drawn to her attention.
	I hope that my hon. Friend will understand the Government's position, and I repeat my offer to write to her shortly about the application of the royal prerogative of mercy. I am grateful for the passion with which she has brought the matter to the House today, and I shall certainly reflect outside the Chamber on behalf of the Government on the points that she has raised.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-four minutes to Eight o'clock.